Government and the insurance sector continue to have dialogue over the government’s plan to move the burden of value-added tax (VAT) costs on healthcare services for insured people from both the insured person and the insurance provider to solely the insured person, Minister of Economic Affairs Michael Halkitis revealed yesterday, explaining that the insurance sector has asked the government to delay the implementation of this VAT change.
Currently, the cost of VAT on healthcare for insured people is shared based on the percentage split of costs in a particular insurance plan. If the government moves ahead with its plan come July, VAT costs will no longer be split, but paid only by the insured person.
Halkitis, who spoke to the media after addressing the Bahamas Chamber of Commerce and Employers’ Confederation’s Power Breakfast at Margaritaville resort, said both sides continue to have opposing views on the government’s decision to make this change to VAT on health insurance.
Halkitis said while the government aims to move forward with the change, the insurance sector wants a transition period before it comes into full force.
“Our objective is to always do things smoothly to cause minimal disruption,” said Halkitis.
“In speaking with the association, number one, certain segments disagree with our position, but they have communicated that if that is the position, then we need a longer transition period, and so that is not something that we’re averse to. We had a meeting with them recently and we’re planning to have another meeting next week, and the idea is to talk to the issue… Our objective is we don’t want to put anybody in a disadvantageous position, but we also just want to make sure that our legislation is consistent with international standards, etc.”
Halkitis said the change government intends to make is the way VAT is charged on healthcare services across the world, and insisted that the government wants to adhere to international best practices.
In June, insurance sector representatives during an appearance on radio talk show Morning Blend Business, explained that the fallout from this position on VAT taken by the government includes possible increased insurance premiums, insured individuals canceling their insurance schemes and more Bahamians seeking big-ticket healthcare services abroad, removing business from local healthcare providers.