Medical costs may rise after GST, says minister

Health Minister Datuk Seri Dr S. Subramaniam says the cost of medical care may increase when the GST is implemented next year. – The Malaysian Insider file pic, December 5, 2014.

The cost of medical care may increase by between 1% and 2% when the Goods and Services Tax (GST) is implemented next year, according to Health Minister Datuk Seri Dr S. Subramaniam.

Dr Subramaniam, in a report by The Star, said although the health service was currently exempted from GST, technical issues remained.

“For example, the services per se are GST-exempt, but the products used in the services are not,” he was quoted as saying.

“That is why we are asking that those products also be exempted from GST. Otherwise, the burden may be passed on to consumers in other forms.”

Dr Subramaniam gave the example of 4,200 brands of essential medicine which will be exempted from GST.

Initially, he said, the Customs Department had said that medication would not be exempted from the tax. However, after further negotiations, “a compromise was reached so that 320 chemical compounds consisting of 4,200 brands are under zero rate,” he was reported as saying after the ministry’s training institution graduation ceremony held at Kolej Sains Kesihatan Bersekutu Sultan Azlan Shah in Ulu Kinta yesterday.

“Of course, we would like for all medications to be exempted from GST. Many medical-related associations are fighting for that, too. So we hope the Customs Department will make a decision because the ministry is not the deciding factor here.”

Dr Subramaniam added that the government was looking into ways to reduce the cost of medical care should prices increase after GST is implemented next April.

This comes amid growing concern that the cost of living will rise once the tax is applied.

Last month, Deputy Finance Minister Datuk Ahmad Maslan had tried to allay such fears, refuting the perception that GST would increase the cost of living.

On the contrary, he said, as recently announced by Prime Minister Datuk Seri Najib Razak, the prices of 54% of 900 items would come down with the implementation of GST.

"Currently, these items are taxed 10% and with GST, they would only be taxed 6%. Also, the daily necessities are not taxed," he said in a report by Bernama.

Domestic Trade, Cooperatives and Consumerism Deputy Minister Datuk Seri Ahmad Bashah Md Hanipah has also given assurance that the government would set up a special court to hear cases against unscrupulous traders who increase their prices indiscriminately after the implementation of GST.

In a separate report by Bernama, he said that 2,200 enforcement officers would be involved in monitoring the prices of goods after the GST implementation.

- TMI