• Caught in the debt trap?

    Help us help you by taking our second annual Debt survey and you could win R3 000.

  • Rich man, poor man

    Culture change from below is the only way to overcome poverty, says Leopold Scholtz.

  • Tech bubble talk

    After the tech euphoria of 2013, the fast-moving sector has hit a speed bump.

Data provided by McGregor BFA
All data is delayed
Loading...
See More

Medical scheme tax credits to go to NHI

Feb 23 2012 17:29 Sapa

Related Articles

KZN to pilot NHI in two areas

Revamp to set groundwork for NHI

SA medical aid fraud decreasing - survey

Vavi: Long road to NHI

NHI reforms piloted in health budget

NHI first phase to start in 2013

 
Cape Town - Tax credits for medical aid contributions is a first taxation step towards the introduction of the national health insurance (NHI), SA Revenue Service (Sars) commissioner Oupa Magashula said on Thursday.

"It is a first step I think to prepare for a proper base, an equitable base for the introduction of the national health insurance later on," he told Sapa.

"You can't use a deduction system because national health systems around the world... work around a credit system."

Finance Minister Pravin Gordhan announced in his budget speech on Wednesday that the credit system would be introduced on March 1, at a rate of R230 a month for the first two beneficiaries and R154 for every further beneficiary.

Magashula was speaking after a post-budget briefing by National Treasury and Sars officials to parliament's standing committees on finance and appropriations.

He explained to MPs that scrapping the deductions system would mean slightly more rands and cents for lower income medical aid members than for their wealthy counterparts, who would effectively get less income tax relief.

The change would not make much difference to the state's revenue intake, he said, but socially it would be more fair.

The budget review put it thus: "Medical tax credits are a more equitable form of relief than medical deductions because the relative value of the relief does not increase with higher income levels."

Gordhan in his budget speech said that the state would need an extra R6bn for the NHI in 2014/15. This could be funded through an increase in VAT, a payroll tax on employers or a surcharge on the taxable income of individuals, he said.

taxation  |  nhi  |  healthcare costs  |  sars  |  budget 2012
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
8 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're Talking About: Small Business

Standard Bank is looking for 12 entrepreneurs to participate in a 10-part TV series. They could win a R1m investment into their dream.
 
 

The rich will pay - Mpofu

The EFF in Gauteng will focus all its energy on improving the lives of the poor, the party's premier candidate Dali Mpofu says.

 
 

Latest elections multimedia

Watch what happened when we blindfolded Helen Zille and asked her to eat random things
13 days to elections - news you need to know
11 Julius Malema quotes you'll never forget
DA won't get 30% - Zille

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...