The National Department of Health confirms impending tax hikes to fund the NHI scheme in South Africa, pending President Cyril Ramaphosa’s approval. NHI’s successful implementation hinges on securing adequate funding, which remains a challenge.
The National Department of Health has confirmed that tax hikes and other tax changes are forthcoming to fund the National Health Insurance (NHI) scheme, which is awaiting President Cyril Ramaphosa’s signature. Health Minister Joe Phaahla, responding to a parliamentary Q&A, mentioned that the funding details for the NHI through taxes, including the rate of tax on individual taxpayers, will be introduced through a Money Bill by the Minister of Finance. The funding mechanisms outlined in Clause 49 of the NHI Bill include general tax revenue, removal of medical aid tax credits, payroll taxes, and surcharges on income tax.
The transitional arrangements specified in Section 57 of the bill refer to the timelines for implementing the NHI laws from 2023 to 2028, with tax changes and funding mechanisms expected to take effect from 2026 onwards. Critics have raised concerns about the feasibility of funding the NHI, with estimates suggesting significant tax increases or payroll taxes to raise the required additional funding. President Ramaphosa has expressed his intention to sign the NHI Bill into law, despite ongoing debates and challenges surrounding its implementation and funding sources.
