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Last updateTue, 15 Aug 2017 10pm

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Finance Minister says Ghc1.6bn paid to scheme

The Ministry of Finance remitted more than GHc1.6 billion into the operational accounts of the National Health Insurance Fund (NHIF) for the 2013 and 2014 fiscal years.

The Minister of Finance, Mr Seth Terkper, who stated this on the floor of Parliament Wednesday, said although Ghana's economy faced macroeconomic challenges in those two years, the government was able to make substantial transfers into the fund.

He was answering an urgent question posed by the Member of Parliament (MP) for Berekum, Dr Kwabena Twum-Nuamah, who wanted to know how much had been paid from the National Health Insurance Levy (NHIL) into the NHIF since 2013.

Dr Twum-Nuamah was of the view that the National Health Insurance Scheme (NHIS) would collapse if the inconsistent payments did not stop.

He said most health facilities had made it clear that they would not be able to render services to NHIS card holders if the current trend continued.

Breakdown

Mr Terkper said the government paid GH£828.4 million and GHtl.06 billion into the NHIF account in 2013 and 2014, respectively, for the payment of claims of service providers.

He said the delays were not deliberate, adding that the accumulation of arrears was not solely dependent on releases.

According to him, the occasional "ups and downs" that the economy went through were to blame.

Payments are being made and some of the arrears are being cleared.

However, he said, payments were being made and some of the arrears were being cleared.

Delays

He said the goal of the Ministry of Finance was to make releases for all fiscal commitments, including payment of the NHIL into the NHIF without undue delay.

"Indeed, the Import VAT and SSNIT 2.5 per cent transfers are automatic in that the funds are transferred directly into the NHIF. However, the transfer of the Domestic VAT component is usually done with a lag to take account of operational processes for VAT collection and payments.

"It is important to note that VAT operates on the credit mechanism. The final and effective amounts due for VAT into the Consolidated Fund, the GETFund, the NHIF, the District Assemblies Common Fund (DACF) has to take account of import tax and credit and refunds, including VAT. It is for these reasons that the law allows payment into the fund with a lag of 30 days," he said.

Mr Terkper said the entire domestic VAT amount was initially transferred into the Consolidated Fund before the Ghana Revenue Authority (GRA) advised the Controller and Accountant-General's Department on the exact amount due the NHIF.

According to the minister, it was envisaged that the enhancements in compliance and completion of the automation of the processes of the GRA would help reduce the lags in transfers to the NHIF and other statutory funds.

At the same time, he said, it was necessary for the statutory funds to take account of the VAT processes in particular in planning their operational activities.


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