Medical scheme tax credits to go to NHI

2012-02-23 17:29

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.

  • christo.stone - 2012-02-23 17:42

    How can you tax someone for NHI who has their own medical aid? I mean...I pay R1200+ 'n month on medical aid FOR MYSELF alone! Seriously...we can't afford more are robbing people dry to the bone.

      Mbulelo Duma - 2012-02-23 20:20

      really, this NHI is a daylight robbery to ppl who already have their own Medical Aid.. Why cant taxes from such 'useless' habits as guzzling and smoking sponsor this health insurance.. It's true ukuthi kushaywa edonsayo..

      Stephen - 2012-02-23 21:25

      nearly there christo,read more into it:instead of raising the standard the cancer find it easier to lower the standard for short term gains and very obvious long term disaster,look at what is happening in the pension reforms! being set up for future plunder & pilage for cancer benefits.

      Jeffrey David Hamilton Walker - 2013-08-20 13:24

      I agree, my medical aid contribution is R3500 + R1000 medical savings/month, and just about EVERYTHING comes off your Savings

  • Active - 2012-02-23 17:56

    Wat is die wet van transvaal.

  • david.streicher - 2012-02-23 18:23

    all on board the gravy train "we have a trillion to burn" (please clap hands ladies and gentlemen) all help needed

  • kosmonooit - 2012-02-23 18:57

    Hello! Allowable Deductions were capped years ago. That makes it equitable across earnings levels. No, this is a move to make private medical schemes less attractive. Why are they popular? Because that's the only way you can be assured quality health care right now, esp. in an emergency. Public Health (funded by use the tax payer) is close to a disaster, as is many other public services. Now they are pipe-dreaming about NHI .... get a grip!

  • Kevin - 2012-02-25 07:10

    To much money is spent on aids and RDP houses. All that money would fund the whole NHI

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