Taxes cripple private health practitioners


Private health practitioners have decried the high taxes levied upon them by government as they impede their ability to provide affordable health services.

Apart from drugs and medical equipment, other equipment that are used in health facilities have Value Added Tax slapped on them, while other facilities have a raft of charges such as licensing fees and work permits for expatriates, among others. All these, practitioners argued recently, forces them to raise the cost of their services.

Ian Clarke, a renowned private health sector practitioner, said that in private hospitals, patients pay for everything as the facilities are taxed, something that the majority of Ugandans cannot afford.

‘We are not in a position where people can pay up. Government should exempt private health practitioners from paying taxes,’ said Clarke at the just-concluded East African Health Federation conference, which brought together private sector practitioners in East Africa, with an aim to harness their participation in public healthcare.

The conference came at a time when Uganda’s health insurance scheme is about to materialise yet the Ministry of Health is only able to meet 55% of the country’s health needs, while the private sector can cover the remaining 45%. At the moment, the Ministry of Health has requisitioned for Shs2.5 billion as start-up capital for the universal health scheme. A bill on private health insurance is already before Parliament for debate.

Chris Baryomunsi, the former Minister of State for health, said government would get into a public private partnership to effect the scheme.

‘The scheme will not work in the public health centres alone but also in the private centres as long as they meet the required criteria,’ said Baryomunsi. He added that government would provide an enabling environment for the private sector to ease their operations.

‘We plan to exempt private health centres from paying taxes and licensing fees. Also, hospital building materials and equipment, among others, shall not be taxed,’ Baryomunsi noted.


According to Baryomunsi, the Shs2.5 billion shall be mobilised from supplementary budgets and given as grants to some facilities that will be accredited. The contributory scheme seeks to see every Ugandan contribute towards their healthcare before they get sick, starting with the salaried workers, with both the employer and employee contributing four per cent, before rolling out to the non-salaried. Some people feel this move could come with a burden.

‘The cost to the employer goes up and the cost of administration will be enormous. There is no way a government can sustain it due to corruption,’ said Clarke, urging government to run the scheme through existing structures such as the National Social Security Fund rather than set up an independent body.

Khama Rogo, the lead health specialist and head of the World Bank’s Health in Africa initiative, said Uganda needs a strong regulatory framework for the scheme to work.

Rogo recommends that the scheme should start with salaried workers before it moves on to the non-salaried in the informal sector. To create sufficient infrastructure, Rogo advises government to provide low-cost credit to investors in the private sector to set up facilities that can in turn provide low-cost quality medical care to the citizens.


Written by Observer Media Ltd. This story was sourced from The Observer website.


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