The Minister of Finance, Pravin Gordhan, today presented his
budget speech to parliament. The budget clearly paves the way for measuring not
only where funds are allocated, but more importantly how funds will be spent.
This newsletter focusses primarily on the impact the budget speech will have on
Private Medical Schemes.
Addressing NHI in the
ministers speach
Addressing the issue of NHI the minister quoted from the
State of the Nation Address where President Zuma mentioned that the National
Development Plan provides a perfect vehicle for united action.
In the light of this and the infancy of NHI in the first
pilot stage it is not unexpected that the minister announced that the initial
phase of NHI will place no additional revenue demands on the fiscus.
However, the minister did indicate that over the longer term
additional funding will be required. The minister indicated that the National
Treasury is working with the Department of Health to examine funding
arrangements and system reforms. To this
regard the minister indicated that a discussion paper inviting public comment
will be published later this year.
The minister
announced the following tax rebates for members of medical schemes:
- Taxpayers 65 and older may claim all qualifying
expenditure.
-
Taxpayers under 65, where the taxpayer or the
taxpayer’s spouse or child is a person with a disability may in determining tax
payable deduct monthly contributions to medical schemes (a tax rebate to be
known as a medical scheme fees tax credit) up to R242 for each of the taxpayer
and the first dependant on the medical scheme and R162 for each additional
dependant.
-
When determining taxable income they can also
claim a deduction for medical scheme contributions exceeding four times the
amount of the medical schemes fees tax credits and claim all qualifying medical
expenses (which excludes medical scheme contributions).
-
Other taxpayers under 65 may in determining tax
payable deduct monthly contributions to medical schemes (a tax rebate to be
known as a medical scheme fees tax credit) up to R242 for each of the taxpayer
and the first dependant on the medical scheme and R162 for each additional
dependant.
- When determining taxable income they can also
claim a deduction for the aggregate of medical scheme contributions exceeding
four times the amount of the medical schemes fees tax credits and any other
medical expenses, limited to the amount which exceeds 7,5% of taxable income
(excluding retirement fund lump sums).
- The General Health budget of R133,6 bn increased
with 4,5% the lowest increase of all major expenditure spending areas.
- District health services R 48,8 bn, increased
6,5%
-
Provincial hospital services R 26,4 bn,
increased 4,6%
- Central hospital services R 18,9 bn, increased
5,1%
-
Health infrastructure R 10,2 bn, increased 22%. This is very appropriate.
-
HIV/Aids and TB R 12,8 bn, increased 17,7%
-
Other health services R 16,4 bn, increased only
3,8%
Possible areas for future consideration by the minister may
be:
- Higher increases in sin taxes
- Tax allowances or rebates for employee wellness
programmes. This will be in line with
international trends and the National Development plan.
Press release