The PF government has aggressively started its push to tax all Zambian citizens between the ages of 18-65 under a new tax disguised as health insurance.
The PF government has been failing to adequately fund critical sectors such as health and education due to the high debt levels and debt repayment.
With a national budget of 51% debt repayment, 40% civil service salaries and only a meagre 9% for social service delivery, the PF government is struggling to find funds to aquire medicines, run hospitals and manage education facilities.
In order to raise funds to run the health sector, the PF introduced a new tax disguised as a mandatory health insurance scheme.
They passed a law to this effect and established the National Health Insurance Management Authority (NHIMA).
In real terms NHIMA is just another tax collection mechanism like ZRA. It will collect this tax on a monthly basis from both employer and employee.
KEY FEATURES OF THIS TAX
1: Every Zambian above the age of 18 years must register and start paying the tax to the PF government. Only the disabled and people above the age of 18 are exempt.
2: Employment status doesn’t matter, everyone must pay whether they are employed or not, even the self employed must pay 1% of their earnings to the health tax authority.
3: If you do not pay this tax you will not get priority for treatment when you get sick, when you go to a government hospital the first thing they will ask you is your health tax card, they will need proof that you have paid before you can be attended to, they will easily be able to check this on their database.
4: There are no exemptions for people who already have private health insurance, every person is mandated by law to pay this tax whether they have private insurance or not.
5: They require you to pay this tax for 4 months before they give you full membership, this means if you get sick within the first 4 months of deductions they will not assist you with your medical bills, not even for the value of the 4 months you would have paid.
6: They have failed to provide a list of acccredited health service providers to date, the hospitals that will participate in this health tax scheme are not yet known. Private hospitals are likely to shun it. We expect that the list will be predominantly government hospitals and clinics and low quality private clinics.
7: They have failed to state the value and cap of insurance cover. Every insurance plan must have a list of items that are covered and the amount which is covered. This health scheme does not provide that information.
What does it cover?
Suppose you have an illness that costs K100,000 to treat, are they going to pay for it like the way private health insurance companies do?
To conclude this is just another tax disguised as health insurance, alot of the funds raised by these scheme will not even be used for Healthcare purposes, funds will be diverted to government for uses such as debt repayment and civil service salaries.
As NDC we published our comprehensive alternative model of Healthcare Financing which we will republish here soon that does not include a mandatory health tax on citizens.
NOTE: THIS IS A TAX MANDATED BY LAW, THOSE WHO DO NOT REGISTER OR FAIL TO PAY THIS TAX WILL BE LIABLE FOR PROSECUTION AND FINES. BY NEXT YEAR IT WILL BE FULLY IMPLEMENTED. THOSE IN FORMAL EMPLOYMENT HAVE ALREADY STARTED PAYING THIS TAX. -NDC