Bestmed Medical Scheme announces decision not to pass on the increased VAT burden to its members
The latest amendment to the Value-added Tax (VAT) Act relating to the increase in VAT rate from 14% to 15% will be implemented effective 1 April 2018.
From this date, service provider tariffs such as doctors, specialists and hospitals, all medicines and consumables billed to medical schemes will increase by 1%.
“The new increased rate has a knock-on effect on just about everything, medical schemes and members thereof included. Our members’ interests remain at the forefront of the Scheme and therefore Bestmed has taken the decision not to pass on the increased VAT burden to our members”, says Jessogan Chetty, Executive Manager: Finance at Bestmed.
The VAT Act provides for;
In terms of section 67(1) of the Value-added Tax Act No 89 of 1992, where the VAT rate is increased in respect of the supply of goods or services, the VAT vendor may recover the VAT from the client or customer.
“The decision taken by the Scheme, suggests that we could possibly incur a financial shortfall for the 2018 financial year, but we will continue to manage our operations accordingly at no disadvantage to our members”, adds Chetty.