Value Added Tax for Drugs (3)
re: VAT exemption for drugs in Ghana
Assuming there is no question of exempting ALL medicinal drugs, I'd say
that at a minimum ALL drugs on the Essential Drugs list should be VAT
exempt. A good case could also be made for all generic formulations
whether or not on the EDL to be exempt, I would think. Vaccines, essen-
tial supplies (syringes etc.), blood giving sets, and other medical
supplies should also be exempt under this category. Basically anything
which can be found in the IDA, UNIPAC or ECHO or similar catalogues
ought to be exempt -- that might be a useful reference point for you.
A second category is branded formulations which *contain* essential
drugs. Should these also be exempt? I would argue that as long as
cheaper generic equivalents are available on a reliable basis the case
for exempting branded products is not so strong.
A third category is that of 'essential' or life-saving drugs which are
nonetheless not on the EDL which might warrant exemption. These are
drugs which are either too new, of use to only a few people, or too ex-
pensive for widespread use to be included on the EDL. How to judge the
'essential' nature of them and who should do the exempting would be is-
sues to discuss.
All of this of course assumes the Ghana EDL is revised frequently and
kept up to date, and is actually used in health services.
One big issue will of course be what happens with the private sector.
The exemption of essential generic drugs will presumably mean that the
private pharmacies will have to charge VAT on their drugs. I would ex-
pect a lot of lobbying from them to make sure that doesn't happen! Will
private medical services be VAT exempt??
It will also be interesting to see what happens with veterinary drugs
and supplies -- I hope the humans will be as well protected as the ani-
I hope this is helpful -- and I hope you will keep AFRO-NETS informed
of the final decision! Good luck in making some tough decisions.
Susan Foster, PhD
Senior Lecturer in Health Economics
London School of Hygiene & Tropical Medicine
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