The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

FINANCIAL Secretary John Rolle said yesterday that no serious consideration is being given to removing value added tax (VAT) from healthcare services and health insurance premiums in this country.

Bahamas Insurance Association (BIA) Emmanuel Komolafe told The Tribune on Tuesday that during a recent meeting between insurance industry stakeholders and members of the National Health Insurance (NHI) secretariat, NHI Permanent Secretary Peter Deveaux Issacs said removing VAT from the aforementioned services was something the secretariat recommended to the government and that it was being considered by the Ministry of Finance.

Mr Rolle yesterday said the matter has been a topic of conversation, but added that no serious consideration is being given to it.

“We’re not moving in that direction,” he said. “We don’t put proposals forward in isolation without knowing the impact it would have on the revenue base. And we have to look at it from a cost recovery point of view.”

Mr Komolafe had noted that the Bahamas is one of only a handful of countries that puts VAT on healthcare.

However, Mr Rolle countered yesterday that this country also has “one of the lowest VAT rates” of any country.

“Our job is to always make taxpayers understand that the system is interconnected,” he said. “Change in one place will shift cost to another part of the system.”

As they brace for the introduction of NHI, health insurance stakeholders have been hoping that the government would embrace some of its recommendations, which include removing VAT from healthcare services and health insurance premiums as a way of reducing the overall cost of healthcare, making it cheaper for consumers and encouraging them to purchase or keep their health insurance.

Other recommendations have been to scrap plans to introduce a public insurer and instead create and enforce a health insurance mandate that would allow insurers to serve those with pre-existing conditions.

“This is consistent with our view during the VAT debate as reiterated in our proposal that healthcare and health insurance should be benefactors of any tax regime,” Mr Komolafe said Tuesday. “It seems fair to state that (the government) may have realised the contradiction in applying additional taxes to healthcare and health insurance while at the same time trying to increase access and make it more affordable.”

However, with just weeks until NHI is implemented, Mr Rolle’s statements suggest the insurance industry stakeholders will come out empty handed in their negotiations with the government.

The government plans to introduce NHI in January, with the first phase to encompass registration and upgrades to public health infrastructure.