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Friday, March 27, 2015

Customs expects private healthcare costs to increase 4% with GST, says report

Private healthcare costs may increase between 3% and 4% come April 1. – Reuters pic, March 27, 2015.Private healthcare costs may increase between 3% and 4% come April 1. – Reuters pic, March 27, 2015.
While Putrajaya has yet to finalise the goods and services tax (GST) structure for private healthcare, the Customs Department is already estimating that private healthcare costs may see an increase of between 3% and 4%.
The Star Online reported that the government agency expects the broad-based consumption tax to be incorporated into consultation fees, which Customs GST division senior assistant director II Norazura Hashim said was not deemed an offence.
“As long as they do not have a separate GST fee indicated in their invoice, they are not doing anything wrong by passing on the cost to patients,” she was quoted as saying by the news portal.
“Due to this, doctors or clinics may in turn raise their consultation fees to cover whatever GST payment they make," she was further quoted as saying.
Consumers who feel they are charged beyond the 4% are urged to lodge their complaints with the Domestic Trade, Co-operatives and Consumerism Ministry, she said.
She added that the ministry had not finalised medical equipment that would be GST exempted.
“When it comes to medical equipment, there is a difference between Item Three and Item Six of the GST Exempt Supply Order 2014.
“All medical equipment purchased by government hospitals are exempted, while only selected equipment are exempted for private hospitals,” she was quoted as saying, adding that the full exemption list would be uploaded to the Customs website soon.
Two days ago, Health Minister Datuk Seri Dr S. Subramaniam said he would announce the final decision on the status of private healthcare services and drugs by the end of this week.
The ministry had requested that the list of medicines under the list zero-GST items be expanded, but it is still awaiting the final decision from the Customs Department and the finance ministry.
"There were three discussions last week with the finance ministry, including the prime minister who is also the finance minister in a closed-door meeting.
"They are finalising matters that were discussed. Maybe within a week, I will get the final decision and after that, we will issue a statement," he told reporters.
The GST will replace the existing sales and services tax system in April. The broad-based 6% tax will be levied on almost everything except a list of essential goods.
Some of the exempted goods include fresh food, public transport, healthcare, domestic water and education fees.
But many have complained about the lack of clarity in the tax's application, especially in categories that cover a large range of items.
Putrajaya said the GST was part of its efforts to reform the tax system, where only about 1.7 million out of 12 million workers pay income tax.
- TMI

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