The AIDS Law Project (“ALP”) welcomes the objectives underpinning Sections 27, 70 and 71 (“the Sections”) of the proposed Draft Revenue Laws Amendment Bill, 2005 (“the Bill”) to increase access to private health services. In this way, the Bill seeks to achieve its objective through the provision of tax subsidies for medical contributions and expenses to self employed and formally employed persons, including their dependants (beneficiaries). It also aims to remove the distinction between on site and off site medical services, an area of the proposals that we are particularly supportive of.
However, we are concerned about a number of issues, both in relation to the substance of the Sections of the Bill as the process by which it has been developed. While this submission will focus on the key substantive concerns raised by the Sections, it is important that we also place our reservations regarding the process on record.
First, we are concerned about the extremely short deadlines imposed for public comment on both the Discussion Document on the Proposed Tax Reforms Relating to Medical Scheme Contributions and Medical Expenses (“Discussion Document”) and the Bill.
Second, we believe that the current proposals should not be viewed in isolation from broader health policy reforms currently underway. In particular, several processes undertaken by the National Department of Health (NDoH) seek to redress the current inequities in the allocation of resources to the public and private health sectors. These are dealt with below.
For this reason, we believe that Sections 27,70 and 71 (read with sections 29) of the Bill should be jointly considered by the Portfolio Committee on Health and the Portfolio Committee on Finance. A joint committee is necessary given that the proposals do not only have tax implications for individual taxpayers. Instead, it directly determines the level of future tax subsidies (generated or foregone) for users of the private health sector for many years to come – since an amendment to the proposed Sections in the next few years is unlikely.
Revenue Laws Amendment Bill – 2005 – ALP