BL Premium reports that the Department of Health (DOH) is working with the National Treasury on the imposition of thresholds for medical tax credits before the introduction of the National Health Insurance (NHI) scheme.

This is likely to affect only high-income earners in the short term as the DOH stressed in a court affidavit last month that what was planned were “modest changes impacting high income earners only”. The DOH strongly rejected the assertion of NHI’s opponents that low- and middle-income earners would be targeted in the initial phases of the rollout of the scheme. Taxpayers benefit from medical tax credits or rebates for qualifying medical expenses including contributions to medical aid schemes. They reduce the amount of income tax payable particularly for low income earners and their eventual removal is envisaged in the NHI Act as one of the ways to fund the system. Their removal or limitation will increase the tax burden on medical scheme members and make private medical scheme membership unaffordable for many.

According to DOH deputy director-general for NHI Nicholas Crisp, medical aid credits represent a loss to the fiscus of about R34bn, an amount that could be used for NHI. Crisp answered questions by MPs on the roll out of NHI during a briefing on Friday to MPs on the department’s annual report for 2024/25. In the 2025/25 budget, tabled by Finance Minister Enoch Godongwana in May, no inflationary adjustments were made to medical tax credits at a cost to taxpayers over three years of R3.8bn.

• Read the full original of the report in the above regard by Linda Ensor, at BusinessLive (subscriber access only)

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