Medical aid tax credits to be phased out within the coming months: report

Taxpayer's tax credits will likely be phased out within the coming months as a means of funding the incoming National Health Insurance scheme.

This is according to Dr Mark Blecher, chief director for Health and Social Development at the National Treasury, who was addressing a GEMS symposium on Friday, reports Die Burger.

According to Blecher, announcements about the phasing out of the credits are expected to be made by finance minister Malusi Gigaba during the mid-term budget on 25 October, and in the main budget speech next year.

Blecher warned that lower and middle-class earners should prepare themselves for the loss of these credits - as these are the groups that will be hit the hardest.

"It is very important that people whose tax will be amended understand the benefits they receive due to these credits, and what they will be giving up to the NHI," he said.

Government is expected to collect close to R25 billion from these tax credits, which will be used to help fund South Africa's poorest citizens under phase 2 of the incoming NHI.

Health minister Aaron Motsoaledi had previously indicated that the priority programmes that would initially be covered by the NHI Fund include healthcare at schools, childhood cancer, women's health (including pregnancy, cervical cancer and breast cancer), mental health services, disability and rehabilitation services, and hip, knee and cataract surgery for the elderly.

The total cost of these implementations is expected to reach R69 billion over the next four years.