Business News of 2013-12-18

Mahama scraps import duty waiver for health workers

Beginning January 1, 2014, the Ministry of Health will start implementing an order from the Mahama-led National Democratic Congress government to scrap the waiver introduced by the New Patriotic Party administration under the leadership of President John Agyekum Kufuor, which enabled health workers to import vehicles without paying duties at the port.

Sources at the Ministry of Health have told the New Statesman that there had been an unusual influx into the “waiver office” to beat the December 31 deadline imposed by the Ministry of Health.

Unconfirmed reports prior to the reading of the 2014 budget had indicated that the Minister of Finance was going to officially announce the scrapping of the waiver. However, this announcement was shelved by the Minister, only for it to be communicated to health workers by the Ministry of Health.

The Kufuor administration, as one of the initiatives to improve the working conditions of health workers, lecturers and senior academic staff in Government approved Universities, as well as Ghanaian Foreign Service officers returning home after duties overseas, introduced a waiver which ensured that vehicles imported in the country not exceeding 2000 cubic capacity did not attract import duty.

However, due to the falling levels of revenue, government has decided to scrap the waiver.

When delivering the last edition of the Monetary Committee Report, Governor of the Bank of Ghana, Henry Kofi Wampah, explained that provisional data on the execution of the 2013 budget for the first nine months of the year showed that both revenue and expenditure fell short of their respective targets.

Dr Wampah stated that the “shortfall in revenue was much higher than the reduction in expenditure.”

“Total revenue and grants amounted to GH¢13.9 billion (15.9% of GDP) falling short of the target of GH¢16.3 billion (18.4% of GDP). The shortfall in government receipts was mainly the result of lower than budgeted domestic revenue collections on account of lower import volumes, decline in commodity prices on the world market and slowdown in economic activity during the first half of the year, due partly to the energy crisis,” he said.

The shortfall in revenue on the account of lower import volumes, according to sources at the Ministry of Finance, has necessitated the scrapping of this incentive for health workers.

“It is unfortunate that such an incentive introduced to ensure that the working conditions of workers are improved is being scrapped. This is unfortunate and will only worsen the plight of health workers,” a visibly annoyed nurse told the paper.

A staff of the waiver office at the Ministry of Health told the New Statesman on condition of anonymity that the number of applications for waivers to clear vehicles from the ports had increased following the directive by government.

“Knowing very well that this is the last time the waivers will be used, several health workers are going to all lengths to ensure that they purchase vehicles within the waiver limit before the expiration date,” he said.