By Roxanna Naidoo
President Cyril Ramaphosa’s signature to introduce the National Health Insurance (NHI) on May 15, 2024 has been met with mixed reactions. The three elephants in the room are: who will foot the bill, will all doctors and healthcare workers now work directly for the government, and will all South Africans be forced to use government-quality healthcare?
The opinion of South Africans, including those abroad is crucial, as they are set to ultimately bear the cost and utilise the standardised medical services in the new dispensation. Large independent firm – Tax Consulting South Africa – has initiated a survey to voice the concerns of all South Africans.
This survey provides direct insight into the thoughts and feelings of South African (SA) taxpayers regarding the NHI. It highlights their primary concerns, hopes, and fears about this major healthcare reform. By giving taxpayers a platform to express their views, this survey provides valuable insights into the nation’s sentiments and highlights the important issues that taxpayers would like the government to address for the successful implementation of the NHI.
Funding the NHI
Over 50% of respondents indicated that they believe the NHI would be funded by a direct increase in taxes. According to the NHI Act, the possible source of funding being considered is a surcharge on personal income tax; removal of the medical tax credit; and reallocation of most of the provincial health budgets to the NHI fund. Clarity has not been provided as to when this will take effect, as it has been advised that the implementation will take place gradually. The surcharge on personal income tax, employee payroll taxes, and the removal of the medical tax credits signals a significant tax burden for taxpayers… A fear raised by the participants in the NHI survey.
Brain drain concerns
The survey highlighted another major potential for a “brain drain” of medical professionals due to the NHI. An overwhelming 81% of respondents believe that the implementation of the NHI will lead to a significant exodus of medical professionals. This could severely impact the functionality of the healthcare system, as losing skilled medical professionals would exacerbate existing challenges in providing quality healthcare.
With 82% of respondents foreseeing a negative impact on the quality of healthcare due to the NHI, this indicates the lack of confidence in the NHI’s ability to improve access and standards. This illustrates many South Africans doubt of the government’s capacity to implement the NHI effectively, and their fears that it may lead to deterioration rather than improvement in healthcare services.
Support for the NHI
Regarding support for the NHI Bill signed into law, 84% of respondents opposed the NHI, predicting higher costs and less access to quality healthcare as a result. This strong opposition reflects widespread concern about the potential economic and practical implications of the NHI.
A majority of 77% of respondents viewed the NHI as a “political manoeuvre” rather than a genuine effort to equalise healthcare access. This suggests many South Africans are sceptical about the government’s intentions, believing the timing of the NHI implementation to be politically motivated given its close proximity to the elections.
Taxpayers seeking relief abroad
The expectation of a decrease in healthcare standards is a dominant sentiment, with 77% of respondents anticipating a negative impact. These results reinforce the concerns about the potential adverse effects of the NHI on the quality of healthcare services. There is a high level of anxiety about the financial implications of the NHI, with a 37% majority of respondents worried that the government will target wealthy taxpayers or people with high-value assets to fund the initiative.
Additionally, 47% of respondents indicated they might financially emigrate due to the negative long-term impact on South Africa or considered formally emigrating to a country with better medical care. This is no surprise as practitioners have noticed a significant spike in doctors consulting emigration experts as well as the elderly and the medically at risk seeking better medical care overseas. An increase in wealthy and high net worth individuals looking for a Plan B option overseas has also been noted with many seeking better opportunities for their families outside of SA as well as protection of their wealth from the SA tax net.
Considering your options
The survey results depicted a bleak picture of public sentiment towards the NHI. Taxpayers are collectively sharing the same sentiments and voicing their concerns about funding, healthcare quality, the professional brain drain, and the political motivations behind the proposed implementation of the NHI.
This survey is more than a collection of opinions, it is a critical barometer of public sentiment. These factors have collectively prompted a surge in enquiries within the expatriate tax firm with many individuals looking to exit SA and cease their tax ties with Sars. Their primary queries surround moving their funds abroad, withdrawing their SA policies and cessation of their SA tax residency. Seeking a better life overseas is a reality for many, and the exodus of South Africans shows no signs of slowing down. Expatriate laws and cross-border tax implications can be complex to navigate when considering your options, make sure to seek expert advice.
* Naidoo is an admitted attorney at Tax Consulting SA.
PERSONAL FINANCE