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Government Considers Removing VAT on Chronic Medication Amid Public Pressure and Revenue Concerns

  • The finance ministry is reviewing the VAT Act, focusing on zero-rated and exempt goods, including healthcare items.
  • There is public pressure to remove VAT and import duties on life-saving medication due to shortages in public hospitals.
  • Medical services are VAT-exempt, but medicines are still taxable at a 15% rate.
  • The ministry aims to maintain revenue for public health services by taxing medication.
  • Removing VAT on chronic medication might not reduce patient costs, as suppliers often retain financial benefits.
  • High medication prices are influenced by supply chain mark-ups, lack of local manufacturing, and high import costs.
  • VAT contributes about N$21 billion annually, 25.6% of total tax revenue.
  • Exempting chronic medication from VAT could impact funding for essential services.

Source: observer24.com.na

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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