March 12, 2015
The Malaysian Insider
I would appeal to the Minister of Finance to exempt all patients from the Goods and Services Tax (GST) of 6% for the following reasons:
1. Good public policy and especially sound national Budgets always seek to be kind, considerate and compassionate to the poor and the underpriviledged, the handicapped and the sick and ill patients. Hence, the GST must be governed by these policy principles too!
2. Taxing doctors` fees for consultation and procedures in private hospitals, because they are deemed by the Director General of the Royal Customs as “outsourced services of private hospitals" can be regarded as inaccurate and inappropriate. This is because doctors are an indispensible and integral part of any private hospital or clinic. They are in fact "in sourced."
3. It is also misleading to treat doctors and specialists as "third party providers" when they are actually "first party," as they are directly and not indirectly, engaged with closely examining patients. Doctors do not examine patients through remote control, at least not yet.
4. Using these customs definitions and technicalities, to justify the imposition of the GST on doctors and consultants, will rightly be regarded by the general public and certainly the doctors and consultants , as unfair and unreasonable.
5. My previous long experience as a senior officer in the Ministry of Finance, tells me that taxation of any kind, is a matter of high government policy and should not be determined by customs officers, however bright they may be. Customs officers are acknowledged experts on customs procedures and the implementation of indirect duties like the GST. However they are not deeply involved like Treasury officers in the policy thinking and formulation of the socio-economic and even political implications of fiscal measures and especially new taxes like the GST.
6. Doctors cannot be expected to bear the cost of the GST. They will naturally pass it onto the poor patients, who will have to face more misery. Is this showing compassionate and caring on the part of government? Indeed it is neither good governance?
7. With rising inflation and the prospects of lower income growth and even possible reduction in employment opportunities in the near future, the GST on medical fees will cause greater hardship to the patients, particularly since the majority will be from the lower income groups.
8. Most importantly, there could be credibility and confidence gap. Serious doubts can arise in the public mind, since both the Budget speeches for 2014 and 2015 had promised that the vital service like health and also education, would be exempt from the GST. We have to be true to our pledge. The government's word should be its bond.
For all these reasons, I believe most Malaysians would support this sincere appeal to the government, in its wisdom, to exempt the millions of unfortunate patients from the GST.
I hope that the Ministry of Finance will chair the meeting with the customs and all stake holders, including the medical associations, this coming March 18 and that GST exemptions will be graciously given to our suffering patients. Then come April 1, when the GST is introduced, we as patients will not feel more pain and the government can feel more wisely rewarded for helping the poor and the weak.
Thank you. – March 12, 2015.
*Tan Sri Ramon Navaratam is the chairman of the Asli Centre of Public Policy Studies.
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