APHM: GST may increase private healthcare costs by 5%

PETALING JAYA: Private healthcare costs may increase by at least 5% after the Goods and Services Tax (GST) is implementation in April next year, estimated the Association of Private Hospitals of Malaysia (APHM).

APHM president Datuk Dr Jacob Thomas said medical costs in the private sector would increase despite healthcare services being exempted from GST.

He said this was due to certain details in the implementation of the 6% tax.

"About 99% of doctors in private hospitals are not employees of the hospital, but operate as independent contractors.

"The Customs Department has deemed doctors operating as independent consultants as 'outsourced services' that can be taxed," he said in a press conference at the Sunway Medical Centre near here on Monday.

Dr Thomas said this meant that the burden of the GST would be borne by the rakyat for the services of such healthcare professionals.

He added that other outsourced services like security, laundry and housekeeping for hospitals would also be taxed, leading to an increase in operational costs.

"We respectfully request for the Government's kind consideration to regard healthcare services as an exempt supply for both private hospitals and healthcare professionals, so that it is truly free of GST as intended by the Government," Dr Thomas said.

It was reported that Health Minister Datuk Seri Dr S. Subramaniam had estimated healthcare costs would go up by between 1% and 2% when the GST is imposed due to technical issues.

However, Dr Thomas disagreed with the projection, saying that the increase would be at least 5%.