Finance Minister Malusi Gigaba has trimmed the tax credits taxpayers receive for their medical scheme contributions to raise an extra R4.2bn for National Health Insurance (NHI) without destroying the affordability of medical scheme cover. The development highlights once again how much more cautious a line Treasury is taking than the Department of Health on the implementation of NHI. Health Minister Aaron Motsoaledi has consistently said scrapping the tax credits altogether could provide billions of rands for NHI, while Treasury has warned that they play a vital role in ensuring medical scheme cover is affordable to low-and middle-income wage earners. In October, it published analysis showing that more than half (56%) the total credits claimed in 2014-15 went to 1.9-million taxpayers with a taxable annual income below R300,000. In total, 3-million taxpayers claimed R18.5bn in medical tax credits that year. Treasury announced on Wednesday that it would be increasing the cap on these t...

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