The National Department of Health in March presented its proposal to mobilise additional resources to fund the new National Health Insurance Scheme (NHIS) which include the introduction of new taxes. In a presentation to Parliament on Tuesday 29 March, the Department said;
“The implications for every person that lives in South Africa is that in exchange for free health benefits (services and care) at the point of care when you need the care, (they) will contribute via the tax collection mechanism. This will include the normal tax collection methods like VAT, personal tax, excise, company tax and so on.”
Below is the breakdown of possible additional funds which can be collected and reallocated towards the NHIS:
- General tax revenue, including the shifting of funds from the provincial equitable share and conditional grants into the fund. This currently accounts for R256 billion per annum.
- Reallocation of funding for medical scheme tax credits paid to various medical schemes towards the funding of NHIS. This is estimated to be around R27 billion in 2019/20.
- Payroll tax – The department said the state already contributes around R50 billion to public service employee contributions in just one medical scheme.
- A surcharge on personal income tax. This would have to be introduced through a money bill by the minister of finance and earmarked for use by the fund.
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