Taxpayers expected to finance NHI

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Taxpayers in South Africa are facing the harsh prospect of soon paying more than three types of different tax for medical services. This follows after the Minister of Health, Aaron Motsoaledi, published the ANC’s long promised White Paper on the National Health Insurance (NHI) in the Government Gazette in December 2015.

The NHI is a proposed health financing system designed to provide access to healthcare services to all at an estimated cost of R256 billion per year, all of which to the expense of taxpayers.

Below is Government’s proposal on ways to finance the NHI:

Revenue Source Definition Examples
Direct Taxation Taxes imposed on individuals or entities in relation to their income, earnings or wealth. Personal or corporate income tax, surcharge on income, inheritance tax.
Indirecte Taxation Taxes levied on transactions or goods and services, irrespective of circumstances of buyer or seller. Value-added tax, national health insurance levy, financial transactions, fuel levy, taxes on alcohol and tobacco.
Payroll Taxation Taxes calculated on payroll, as either employer or employee contributions, or both. Contribution to National Health Insurance deducted from pay check.
Premiums Collection of premiums or membership contributions from employee or informal sector. Ghana NHI for informal sector workers.

“The NHI is a wonderful idea at the expense of already overburdened taxpayers. The problem that we face is not with the NHI, but the deep dark hole into which billions will disappear every year. We have seen it with Post Net, Petro SA and more recently SAA,” said Armand Greyling, Law and Policy Analyst at AfriBusiness.

“The state is a very good taxman, but a very bad businessman,” added Greyling.

AfriBusiness will continue to keep a watchful eye on the development of the NHI and the financing model thereof, and will oppose and deliver commentary on any proposed legislation promulgated by Government in this regard to protect the interests of all South Africans.