NHIS Funding: Adopt General Income Taxation – Economist To Government

Dr Kofi Orleans-Lindsey is a Lawyer and an Economist

Renowned Economist and Lawyer, Dr Kofi Orleans-Lindsay, has recommended to the ruling New Patriotic Party (NPP) government that it adopt the General Income Tax system as its source of funding for the National Health Insurance Scheme rather than the current reliance on Consumer taxes.

According to him, the inability to adequately plan and Project inflows from Consumer taxation makes this an unreliable source of funding for the Scheme. He went on to say that the apparent absence of an effective monitoring regime could pave way for leakages and fraud or bloating of the cost of services provided under the NHIS and that focus needed to be brought to this area.

He was speaking to Host of the Morning Xpress on Radio XYZ 93.1FM, Neil Armstrong-Mortagbe, in relation to calls for the National Health Insurance Scheme (NHIS) levy to be increased.

Recently, the Chief Executive Officer of the National Health Insurance Authority (NHIA), Dr. Samuel Yaw Annor, called on Government to come up with varied financial models to sustain the scheme, stressing that Ghanaians should be ready to pay high taxes to help its financing.

In a related development, the Association of Private Medical Health Providers has threatened a legal suit against the Government if it refuses to pay their outstanding debts owed them by July 1, 2018.

Dr Orleans- Lindsey, who is also a legal practitioner, contends that the tax regime being implemented in Ghana and how incomes from these taxes are channeled to consumption should not be encouraged.
”When you look at taxation, it must be targeted so that you can achieve your objective…but the way we’re doing it because we have a problem, because we need to solve a problem, we tend to take such a sledge hammer-like approach to raise revenue. I don’t think it’s the right approach,” he said.

The National Health Insurance Scheme (NHIS) was established to help Ghanaians who could not afford health care services in the country; the Scheme now stands on the verge of collapse if new approaches are not introduced to make it more sustainable and efficiently run.
Commenting further on this matter, Dr. Orleans Lindsay said: “I don’t think we thought through the financing of the National Health [Insurance] scheme very well; if you look at the United States and the United Kingdom, they still have issues with their health system…at the moment when you have this general bracket system where we can not be able to check the cost effectiveness of the business and the service providers, coupled with the lack of assured consistent Service quality, we will tend to have challenges with this system.”

To him, the consumption tax system would have its own objectives hence, at the end of the day, Ghanaians “will feel burdened because we feel that is the fastest way of revenue mobilization for the country.”

He however indicated that funding of such programmes could very well come from the Oil sector which generates a lot of revenue.

He continued to advise Government to also monitor the service providers to prevent further leakages of funds pumped to them.

“…the most important thing is for those looking at the health care system to check the providers of the service, because there is so much fraud in health care systems; it happens everywhere, Dr Lindsay said.

The economist also urged the government to employ or pave way for relevant Professionals in addition to auditors, to really check the cost of services provided by private service providers to prevent “bloating” of prices of services rendered.

 

Source: Ghana/myxyzonline.com