Wednesday, December 4, 2013

Implementing both value-added tax (VAT) and a contributory National Health Insurance (NHI) scheme cannot co-exist

NHI ‘too much too fast’ given VAT

Head of Coalition for Healthcare Reform says ‘only so much’ private sector can bear, as NHI steering committee moves ahead

Guardian Business Editor

As a government-appointed steering committee on National Health Insurance (NHI) ramps up its activity surrounding the potential implementation of the healthcare initiative, a former chamber of commerce president has warned that implementing both value-added tax (VAT) and a contributory NHI scheme cannot co-exist.

Winston Rolle, former chamber of commerce president, and a former head of the Coalition for Healthcare Reform, a private sector group formed to highlight concerns surrounding the possible implementation of NHI prior to the end of the last Christie administration in 2007, said there is a limit to how much the private sector can bear in the form of taxation.

“There were seven or eight guiding principles we’d said we need to look at before we can talk about modernizing our health system and I don’t see where that position would’ve changed.  It still boils down to one, cost, and two, who’s going to pay for it?

“Obviously with the changes that would’ve taken place in this fiscal year, with the business license fee and now with talk of the implementation of value-added tax (VAT), and another scheduled national insurance increase coming up as well now, you are talking about yet another expense that has to be borne by the citizenry and the business community.  There’s just only so much that they can take.  I think it may be a case of trying to do too much too fast,” said Rolle.

Arguing that “putting in place a system that can’t meet the objectives would be just as bad as what you have now”, Rolle suggested that the government has to take into consideration “not only VAT but the whole taxation system” and ensure that those who are required to “pay for this cost have the ability to pay”.

His comments come as Guardian Business understands the government’s steering committee on NHI has begun to meet every two weeks as it attempts to move the NHI agenda forward.

In October, Minister of Health Dr. Perry Gomez said that implementing NHI remains a priority for the Christie administration.  He suggested that an updated costing of the roll out of the initiative would be completed by the end of the month.

Meanwhile, the government is forging ahead with controversial plans to implement VAT at a rate of 15 percent by July 2014, in an effort to address a spiraling debt situation and respond to calls from the World Trade Organization (WTO) to phase out high import tariffs, a key source of government revenue.

Yesterday, sources close to the government’s steering committee on NHI revealed that the group, which was appointed in July of this year, has begun to meet once every two weeks and has already provided a document outlining the terms of reference for NHI to Gomez.

Gomez himself, described as a “passionate advocate for equity in access to healthcare” by sources close to the committee, is said to be keen to see the initiative move forward, addressing the rising cost and inaccessibility of healthcare to many Bahamians.

While the minister had earlier suggested that the updated costing for NHI – how much the government would need to cover the launch and maintenance of an expanded publicly-funded healthcare program – would be complete by last month, Guardian Business understands that this element of preparation is yet to take place.

Guardian Business understands that among those on the steering committee, who include Edison Sumner, president of the Bahamas Chamber of Commerce and Employers Confederation (BCCEC), and John Pinder, president of the National Congress of Trade Unions of The Bahamas (NCTUB) and the Bahamas Public Service Union (BPSU), there are some reservations about the feasibility of implementing NHI given government’s intentions to move ahead with VAT in particular.

It is believed that among the suggestions emanating from the committee are the possibility for the government to implement NHI in phases, with an appreciation for the fact that such a staged implementation – rather than the immediate launch of a comprehensive national health system ­– would more closely approximate what has happened in other countries.

Meanwhile, it has been suggested by sources close to the process that based on the current progress with respect to NHI, the full costing of the initiative may not be completed until next April.

Rolle said he has not been personally informed of any specific advancements in the NHI agenda, but suggested that the government must ensure it seeks the input of the private sector as it moves forward.

“The same parties who were involved in 2007 would want to have sight of and have input into anything that comes up,” he said.

December 03, 2013