Gov't scraps taxes on pharmaceuticals, smartphones

Taxes on some locally-produced pharmaceutical products and some of the raw materials used to produce them will be removed, according to Finance Minister Seth Terkper.

Government in July this year stated that it was considering a re-assessment of the imposition of the 17.5 percent Value Added Tax (VAT) on locally-produced drugs.

This was followed by a written appeal by the umbrella-body of drug manufacturers, the Pharmaceutical Manufacturers Association of Ghana (PMAG), to the Ministry of Finance and Economic Planning and a subsequent meeting with the President to discuss the impact of the revised VAT law.

Drug producers currently pay VAT on 66 items out of about 200 different materials used for manufacturing drugs locally, and are later reimbursed by the Ghana Revenue Authority (GRA).

However, producers have often complained about the GRA’s lengthy bureaucratic procedures which often cause undue delays in reimbursement of manufacturers.

The pharmaceutical industry in the country is under serious strain from cheap, imported pharmaceutical products mainly from Asia. High cost of credit, poor electricity supply, and expensive imported raw materials are some of the challenges bedevilling the sector.

Presenting the 2015 budget and economic statement to Parliament, Wednesday, Terkper also revealed that taxes on machetes and cutlasses would be removed in 2015.

He added that Government would also scrap taxes on all smart phones imported in 2015.

Terkper also stated that the Ghana infrastructure fund will begin full operations in 2015 to support infrastructural development.

The Ghana Export-Import Bank would also be created to lead in the strategic positioning of Ghana as an export-led economy, according to the Finance minister.