PUTRAJAYA: The cost of healthcare service is expected to rise by only between one and two per cent with the implementation of the Goods and Services Tax (GST) from April next year, according to Customs director-general Datuk Seri Khazali Ahmad.
He said the report that stated that the cost of healthcare service would rise by five per cent with the implementation of the GST was untrue and had caused unnecessary panic and confusion among patients and consumers.
Khazali said there were some existing taxes in the healthcare service that would be abolished with the implementation of the GST, while some items would also be exempted from the GST.
For example, he said the service tax of six per cent currently imposed on room and food provided by private hospital would be abolished in the era of the GST.
“Normally, the component of cost for the room is between 10 to 20 per cent of the actual
cost charged to in-house patients.
“This savings must be channelled to the patients,” he said in a statement here yesterday.
The sales tax of 10 per cent on several medical supplies, such as gloves, beds and hospital equipment, would also be reduced to only six per cent with the implementation of the GST.
Main medical equipment for private hospital would also be exempted and zero-rated under the GST (Relief) Order 2014, Khazali said.
Khazali said 2,000 medicines had also been listed as zero-rated goods and negotiations were ongoing between the Customs Department, Health Ministry and the Finance Ministry to expand the
list to other types of medicines.
Some services obtained by the hospital, such as security, parking and other professional services (other than medical service) were currently subjected to the service tax of six per cent and would result in cost-neutral with the implementation of the GST.
On Dec 15, the Malaysian Private Hospital Association was reported to have called on the government to consider not to impose the GST on private healthcare industry in a comprehensive manner.
Its president, Datuk Dr Jacob Thomas, although the GST was not imposed on the public healthcare industry, it was feared that the patients seeking private healthcare service would have to bear the costs which were not exempted from the GST, such as laundry, laboratory and food. — Bernama