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Mediclinic News : YOU COULD LOSE AS MUCH AS R12, 000 A YEAR FROM THE NHI TAKING YOUR MEDICAL AID TAX CREDITS

Title

YOU COULD LOSE AS MUCH AS R12, 000 A YEAR FROM THE NHI TAKING YOUR MEDICAL AID TAX CREDITS

Date

2019-08-13

Link

#comment-4577268165

News Description

The new National Health Insurance (NHI) Bill, tabled in parliament on 8 August, sheds some light on the new universal health coverage will be funded. The main question for medical aid members and other taxpayers is whether they can still belong to medical aids and if so, whether they will be forced to pay not only their medical aid contributions, but to also contribute towards the NHI. According to Aneria Bouwer, partner at law firm Bowmans, the answer to both questions is ‘yes’, although the details have not yet been released. Bouwer said that the NHI will be funded by way of: General tax revenue, which will include transferring funds from provincial health budgets to the NHI Fund; A payroll tax (employer and employee); and A surcharge on personal income tax. Taxpayers’ medical scheme fees tax credit will be reallocated to the NHI Fund; Tax credits The proposal that Taxpayers’ medical scheme fees tax credit be reallocated to the NHI Fund has previously been mooted as a way for funding the NHI. “However, it seems more certain that taxpayers will no longer receive medical scheme fees tax credits, which for a family of four, currently provides relief of just more than R12,000 per year,” Bouwer said. This amount is determined annually by SARS which states that the taxpayer who paid the medical scheme contributions is entitled to R310 per month in rebates. This rises to R620 per month for the taxpayer and one dependant; or R620 in respect of two dependants. Taxpayers are also entitled to R209 per month for each additional dependant on the scheme. Total cost to taxpayers? “There is as yet no indication as to how much this will cost taxpayers,” Bouwer said. “The taxes will be imposed by a money Bill to be introduced by the minister of Finance. According to the memorandum, these tax options will only be evaluated as part of the 6th and final stage of implementation, which will presumably not be before 2022. “Interestingly, it refers to the evaluation of the new tax options ‘in a favourable economic environment’,”. Bouwer said that the NHI bill also envisages that the payroll tax will be ‘small’ although there is no indication as to what this means. “In the part of the memorandum dealing with the financial implications for the state, it refers to the various financing options, and then states that ‘due to the current fiscal conditions, tax increases may come at a later stage of NHI implications’,” she said. “It thus appears that further taxes will only be imposed at a later stage after evaluation of the potential impact thereof, taking into account the economic and fiscal environment. “There is no doubt that taxpayers will find the additional tax burden a bitter pill to swallow,” she said.
Created at 2019/08/19 03:01 PM by Mediclinic
Last modified at 2019/08/19 03:01 PM by Mediclinic