BUDJET: Removal of duties on raw materials for drugs

Accra, Nov. 16, GNA - To further encourage local pharmaceutical industries to increase the supply of locally produced drugs and support the current National Health Insurance Scheme (NHIS), the Government is proposing that VAT and import duties on raw materials and packaging materials used in manufacturing drugs for treatment of HIV/AIDS, Tuberculosis and Malaria be removed.

Presenting the Government's 2007 Budget and Financial Statement to Parliament, Mr Kwadwo Baah-Wiredu said the Food and Drugs Board would be mandated to ensure that the concession was not abused by drug companies.

He said to ensure the sustained development and competitiveness of the pharmaceutical manufacturing sector and to guarantee that locally produced products were completely free from VAT, it was also being proposed that all relevant pharmaceutical products be zero-rated. =93This will ensure that locally produced pharmaceuticals compete on the same basis with their imported substitutes.

=93The pharmaceutical industry is, therefore, invited to take advantage of Government's support and improve its local production capacity with the intention of entering the lucrative international markets, starting with the West Africa Sub-Region.=94 Mr Baah-Wiredu said the Government was proposing a five per cent Concessionary Import Duty Rate on raw materials imported by registered manufacturers.

He said currently there were manufacturers whose raw materials were admitted at concessionary import duty rate of 10 per cent, same as import duty charged on corresponding finished products.

=93To make such manufacturers competitive, it is proposed to admit the raw materials that fall under this category at 5 per cent.=94 Mr Baah-Wiredu said the Government recognised the need for guaranteed market for local rice and poultry products.

In this direction, Government would actively promote the use of locally produced rice and poultry products by all public institutions like schools, hospitals and the security agencies, he said. He said this programme would be coordinated by the Ministry of Food and Agriculture while the Rice Growers' Association and Poultry Farmers' Association would work closely with the Ministry to ensure its effective implementation.

Mr Baah-Wiredu said a major highlight of the 2007 Budget would be the implementation of the District Industries Programme (DIP) under which each of the 138 Districts would be assisted with funding to create an enabling environment and play a catalytic role in the creation of district industries by partnering with the private sector investors. He said the Ministry of Trade, Industry, Private Sector Development and President Special Initiative would provide technical advice to the MMDAs, while the Ministry of Local Government, Rural Development and Environment would coordinate the programme.

Mr Baah-Wiredu said the programme would, however, be directly implemented by the MMDAS.

On home ownership, Mr Baah-Wiredu said the housing sector had engaged the attention of Government in many ways. He said in 2005, the Government moved to reduce the burden of home ownership by amending the Internal Revenue Act to provide for the deductibility of mortgage interest for tax purposes and efforts would be intensified to ease the constraints on the availability of long-term mortgage funds and short-term construction finance.

He said the Ministry of Water Resource, Works and Housing (MWRWH) was cooperating with Social Security and national Insurance Trust (SSNIT), HFC Bank and the International Finance Corporation of the World Bank to provide seed money to a number of banking institutions to provide mortgage loans with maturities of up to 15 years and short-term funds to real estate developers as construction finance.

Mr Baah-Wiredu said to increase access to housing for public sector employees, the Government had made available funds to HFC Bank to provide mortgage loans at favourable rates to public sector employees. Initially, this facility will be made available to employees in the Judiciary, Medical Services, Ghana Education Service, Civil Service, the Military, Police and other security agencies.

The scheme will be expanded eventually to cover the wider public sector.

Additionally, a revolving fund will be set up to assist public sector employees to meet down payment requirements for mortgages.

Mr Baah-Wiredu noted that there was a high misuse or wastage through consumption of utility services by employees from within Government organisations and said the Government's desire to rationalise the consumption of utility services, especially in public institutions remained a high priority.

He said as a first step towards the control of energy consumption by Government agencies, government was proposing that all public buildings (MDAs, MMDAs and government houses etc) were fitted with pre-paid electricity meters.

He said to cut down cost in the use of telephone facilities in governmental organizations, the Ministry on a pilot basis, would install a call accounting and least cost routing system which was able to track and monitor the use of telephones.

It is expected that the system will be replicated in all public institutions to effectively monitor, control and manage the use of telecommunication resources in all governmental organizations. Mr Baah-Wiredu said a similar monitoring and tracking system would be designed for the use of water in public institutions.