VAST Ghana Urges Fiscal Reforms in 2025 Budget to Strengthen Healthcare Financing
The Executive Director of Vision for Accelerated Sustainable Development (VAST) Ghana and National Coordinator for the Ghana Non-Communicable Disease Alliance (Ghana NCD Alliance), Labram Musah, has outlined key recommendations for consideration in the 2025 Budget Statement, which is set to be presented to Parliament on Tuesday, March 11, 2025.
According to Mr. Musah, the government must take urgent steps in the budget to address health financing challenges and ensure sustainable funding for critical healthcare initiatives.
His key recommendations include:
- Upward review or restructuring of the betting tax – The government should either increase or reform the existing betting tax to address concerns over the rapid proliferation of sports betting, particularly among young people.
- Uncapping of the National Health Insurance Levy (NHIL) – To ease financial pressure on the National Health Insurance Scheme (NHIS), the government, through the Ministry of Health, must initiate an amendment to the Earmarked Funds Capping and Realignment Act (Act 947).
- Review of excise tax on unhealthy products – An increase in taxes on tobacco, alcohol, sugar-sweetened beverages (SSBs), energy drinks, carbonated drinks, and ultra-processed foods should be implemented.
- Earmarking excise tax revenue for health interventions – A portion of the excise tax should be allocated to support non-communicable diseases (NCDs), health promotion, and other critical healthcare needs.
- Repurposing the COVID-19 Fund for NCDs – The government should channel the COVID-19 Fund towards supporting the Ghana Medical Trust Fund (MahamaCare) for the treatment of NCDs.
- Tax exemption on essential medicines – The importation of essential medicines should be exempted from taxes to ensure affordability and accessibility.
Support for MahamaCare Initiative
Mr. Musah lauded President John Dramani Mahama’s upcoming launch of the Ghana Medical Trust Fund (MahamaCare), which is dedicated to financing NCD treatments.
He emphasized the urgency of such an initiative, given that NCDs account for 45% of annual deaths in Ghana and contribute to over 41 million deaths globally each year.
Excise Taxes and Health Sector Financing
In 2023, the government introduced excise taxes on unhealthy products through the Excise Duty Amendment Act, 2023 (Act 1108). However, these taxes are not benchmarked to inflation, causing prices to become relatively cheaper over time and resulting in reduced revenue.
The World Health Organization (WHO) recommends regular reviews of excise taxes to align them with inflation rates.
Data from the Ghana Revenue Authority (GRA) shows a significant rise in excise tax revenue, particularly from SSBs:
- 2012: GHS 228.62 million
- 2017: GHS 406.02 million
- 2022: GHS 735.46 million
- 2023 (Post-Tax Introduction): GHS 1,325.57 million
Despite this increase, the Minister of Finance highlighted that NHIS faces financing shortfalls due to the capping of NHIL funds and resource misallocations. Presently, less than 60% of NHIS funds go towards claim payments, impacting efficiency and service delivery.
Rationale for Betting Tax Review
The government’s decision to scrap the betting tax should be reconsidered, according to Mr. Musah. He noted that the unchecked rise in sports betting has led to a public health crisis, exacerbating issues such as anxiety, depression, financial distress, and substance abuse.
These conditions contribute to NCD prevalence, including cardiovascular diseases and hypertension. Reforming the betting tax structure could serve as a preventive measure while generating additional revenue for health initiatives.
Call to Action
Mr. Musah reiterated the importance of prioritizing health financing in the 2025 budget. He emphasized that uncapping the NHIL and earmarking excise tax revenue for healthcare would improve access to essential medical services, particularly for individuals burdened by high out-of-pocket costs for NCD treatments.
The government’s adoption of these recommendations would not only strengthen Ghana’s healthcare system but also safeguard public health by addressing emerging challenges associated with NCDs and lifestyle-related diseases.
