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Table 2 Financing incidence analysis estimation techniques

From: Who pays for health care in Ghana?

Component Share in Total Health care financing Source of Data Ratesa Computation technique
Taxes 47%    
Personal Income Taxc 5.2% GLSS, 2005/2006 5%-20% depending on income level. Apply the appropriate tax rate and tax thresholds on the gross taxable income (salaries and wages received, income from business or professional practice/activities, part of dividends and interest received and/or accrued on deposits) of working age individuals within each household within the taxable range
Corporate Income Tax 7.1% GLSS, 2005/2006 Rate is 28% and this is paid quarterly in the case of large companies. Apportioning the total corporate tax receipts based on the Ministry of Finance data to households based on the tax shifting assumptions. Assumption of tax shifting includes certain percentage borne by shareholders (the GLSS collected information on those who receive dividends) and the rest by households through consumption. The tax shifting assumption was equal (50:50) tax burden shared between consumers and shareholders/capital owners
Value Added Tax (VAT) 11.3% GLSS, 2005/2006 15% on standard rate goods and services The VAT rate is applied to expenditure of goods and services that are standard rated excluding the zero-rated and exempted goods (since 2.5% is specially earmarked fund for education and 2.5% for health services, 10% was considered in the calculations)
National Health Insurance Levy 2.4% GLSS, 2005/2006 2.5% on standard rated goods and services The same distribution across households as VAT but at 2.5%. NHIL rate is applied to expenditure of goods and services that are standard rated excluding the zero-rated and exempted goods (the same goods and services as VAT).
Import Duty 8.0% GLSS, 2005/2006 Varied depending on item Comprehensive list of items subject ot import duty and amount received in duty for each item was obtained from Custom Excise and Preventive Service (CEPS) and this amounts were allocated to households based on reported consumption of these imported items from GLSS
Fuel Levy 8.5% GLSS, 2005/2006 ¢716.72/litre for petrol
¢429.96/litre for Diesel
¢353.88/litre for kerosene
Since fuel is consumed by households (for both personal and public transport) as well as corporate users, estimation involved a process of generating the component attributable to public transport users, users of private transport and those attributable to users in businesses
Other 4.3% GLSS, 2005/2006 Includes taxes on cigarette, drinks, stamps, airport departures, and unidentified levies. Not calculated (small share of total revenue)
Insurance 5%    
National Health Insurance Scheme 5% SHIELD household survey 2008b   Total national health insurance contributions is made up of premium contributions of the informal sector and payroll deduction of formal sector workers
Out-of-pocket payment 48%    
OOP payments 48% GLSS, 2005/2006   Comprehensive household expenditure on medicines, consultations, preventive and curative treatments, procedures excluding transportation were summed up
  1. aThis applies to the taxes and are based on the 2005/2006 assessment year: NB: GLSS-Ghana Living Standard Survey
  2. bThis was our own survey that was collected to complement the GLSS data and to answer key questions on the NHIS
  3. cRebates is not a common practice in Ghana *Inter-bank exchange rate = ¢9,072.12 to US$1.00 in 2005