New taxes needed to fund South Africa’s next NHI: the government

The government will eventually have to collect additional taxes to fund its new national health insurance scheme, says Deputy Director General of Health Nicholas Crisp.

Presenting the program to parliament this week, Crisp said much of the NHI’s funding will come from the reallocation of health care funds and existing tax credits. He reiterated that there was already “a lot of money in the system” and that this would be the basis of the funding as a starting point.

However, he noted that additional fees would need to be introduced over time to help fund the NHI scheme, including the possible introduction of:

  • An increase in value added tax (VAT);
  • A change in general taxation;
  • Addition of a payroll tax.

Crisp added that it is “highly unlikely” that the country’s wealthy and middle-class taxpayers will pay more than they already pay for private health care.

The opposition Democratic Alliance has warned that the planned NHI will be inaccessible and will ultimately “break the back of the country’s middle-class taxpayers.”

“Only 9% of South Africans contribute 40% of South Africa’s total tax revenue. Without recent data to determine the impact that COVID-19 has had on the tax base, it is not difficult to understand why it will be difficult to obtain the financing of the NHI from the fiscus “.

South Africa’s national debt and unsustainable budget deficit make it extremely impossible to consider adding a new multi-billion dollar spending item in the form of NHI, Clarke said. She added that South Africa must have this full assessment before continuing with the NHI bill, the party said.

“It will affect the poorest of the poor, break the back of the middle class that pays taxes, and could bankrupt our economy.”

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