Health department promises no new taxes for NHI — for now
Anban Pillay says ‘it is only in the final stages that Treasury will be introducing any form of taxes’
No new taxes will be implemented for National Health Insurance (NHI) for the time being, a senior health department official said on Thursday.
NHI is the government’s policy for achieving universal health coverage, which aims to ensure everyone has access to healthcare that is free at the point of care.
The government’s long-awaited NHI Bill was tabled in parliament on Thursday, paving the way for the establishment of an NHI Fund that will purchase services on behalf of patients from public- and private-sector providers.
One of the key questions about NHI is how the government plans to fund it, given SA’s tight fiscal environment and weak economy. The health department’s deputy director-general for NHI, Anban Pillay, said the government would not initially raise taxes to finance NHI, and would instead reallocate funds within the health budget.
“The approach in the initial phase is there will be a transfer of funds from the conditional grants into the NHI Fund, a well as movement of funds from the equitable share,” he told reporters at a media briefing called by health minister Zweli Mkhize.
“Initially government will not be raising taxes to fund the NHI but using the funds that are currently available more efficiently. It is only in the final stages that Treasury will be introducing any form of taxes,” he said.
The bill says there will be an evaluation of new taxation options in the final stages of implementing NHI, provided there is a “a favourable economic environment”. These include a surcharge on income tax and a “small” payroll tax.
The Treasury is working on a new financing paper for NHI, but has yet to make it public.