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Malaysian Customs denies plea of 5% rise in healthcare costs due to GST

Malaysian Customs denies plea of 5% rise in healthcare costs due to GST

KUALA LUMPUR: The Royal Malaysian Customs (JKDM) has denied an allegation that the implementation of the Good and Services Tax (GST) will increase the cost of healthcare by 5 percent next year, by a local medical association here the other day.

Its Director-General Datuk Sri Khazali Ahmad said the allegation is not only incorrect but will cause concern and confusion among patients and consumers.

According to him, the cost of health care is expected to increase between 1 to 2 percent depending on several factors.

“Currently, under the GST Act the 6 per cent is imposed on the provision of lodging and meals by private hospitals.”

“However, during the implementation of GST, this part of the tax can be claimed back so the GST on room and board will not be imposed on patients; additionally the cost of room and board usually make up between 10 to 30 percent of the total cost incurred by in-house patients.”

“These savings should be channeled to the patient,” he said in a statement uploaded on the Ministry of Finance FB page today.

In addition, he expressed that some hospital services are ‘cost-neutral’ like security services, parking and professional consultancy services that are subject to the existing service tax of 6 percent.

Through the implementation of the GST, the patients or consumers will likely receive several cost-savings on several items previously subjected to sales tax by the hospital.

“Some medical supplies such as gloves, hospital beds and equipment are currently subject to a sales tax rate of 10 percent. With the implementation of the GST, there will be some savings because GST is at 6 percent.”

“Primary healthcare equipment for private hospitals are exempted from GST so there is zero effect in additional costs in that category.”

“Health services, salaries and fringe benefits are also exempted from GST,” he explained.