Concerns over VAT increase to fund NHI

THE funding of South Africa's ambitious National Health Insurance (NHI) initiative has recently sparked significant concern among medical professionals and civil society, as government proposals indicate a potential 0.5% rise in the Value Added Tax (VAT) to support this landmark health reform.

- YOGASHEN PILLAY [e-mail]

Dr Mvuyisi Mzukwa, chairperson of the SA Medical Association (SAMA), yesterday said that they noted with growing concern the recent indications that the government is considering increases to VAT as a means to fund the NHI.

"While SAMA supports the objective of achieving universal health coverage, we must be unequivocal in our assessment: relying heavily on VAT to finance NHI is both economically regressive and socially unjust," Mzukwa said.

"VAT is an inherently blunt instrument. It applies equally to all consumers, regardless of income level, disproportionately affecting lower-income households who already spend a larger share of their income on basic goods and services."

Mzukwa added that increasing VAT to fund the NHI risked deepening inequality, the very issue the NHI purported to address.

"SAMA urges the government to adopt a more progressive and diversified approach to funding universal health coverage," he said.