Tobacco and Alcohol Taxes to Fund NHIS

The National Health Insurance Authority (NHIA) has proposed new taxes on tobacco and alcohol to raise further revenue to fund the scheme.

At the meet-the-press in Wa recently, the regional director of the scheme, Mr. Abass Suleymana, stressed that it was one of the measures aimed at improving upon the health system in Ghana.

“We are exploring ways to improve revenue sources for the scheme, and we find taxes coming from tobacco and alcohol as one of the best ways to improve on the funding” Mr. Suleymana stressed.

Mr. Suleymana disclosed that the financial sustainability of the scheme and the delay in reimbursement of service providers due to a large volume and value of claims were the two major challenges confronting the operational system of the scheme.

According to the scheme’s manager the current subscription renewal cost generated from a narrow group of subscribers who pay for their subscription have proven to be inadequate, hence the decision to refocus.

“Ensuring financial sustainability through innovative measures, as well as ensuring digitization of membership registration across the country, is the major focus of the NHIA now”, he said.

Other challenges include illegal charges on issued members and the high cost of medicines.

The NHIS burdens still seem to persist in spite of the national subscription of over 10.5 million people.

The finance minister, Mr. Ken Ofori-Atta, in his mid-year review, tabled an adjustment in the Value Added Tax structure which now improves the VAT component of the NHIS Levy.

Tobacco and alcohol taxes have over the years been referred to as ‘sin taxes’, however government of Ghana, on realising the worthwhile revenue source for many countries because of their inelastic demands, has approved it’s taxes.

By: Abigail Karikari