GST : more than meets the eye

IMG_0845.JPGThe new year has dawned. 2015 is a year like no other. The impending loom from the implementation of the Goods and Services Tax (GST) cannot be ignored. Despite the Government’s assertions that impact on the patients will be minimal, concerns are growing that escalation in healthcare costs is inevitable.

Healthcare does not exist in a bubble and thus it would be almost impossible to cushion the effect from taxes on other areas, from the utilities to the supply chain. Although some items are tax exempt, the storage space isn’t, and neither is the cost of transportation. It would be foolish to think that the impact on healthcare will be minimal. Customs has insisted that there will only be a 1-2% rise. Private hospitals are forecasting a much steeper increase of 5 %.

Insurance policies, apart from life insurance, will be subjected to GST. Even for doctors, medical indemnity insurance will be subject to GST, for which the Malaysian Medical Association is requesting exemption.

There are so many intertwined facets in healthcare that will surely have an impact on costs. Taxes are inevitable in most societies but the government must first display financial prudence before passing the buck to the citizens. So they should stem excesses and proactively tackle corruption if the GST is ever going to be successful in improving the country’s coffers.