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NSSA scheme to squeeze taxpayers
Shakeman Mugari, The Zimbabwe Independent
January 19, 2007

http://www.theindependent.co.zw/viewinfo.cfm?linkid=11&id=9862&siteID=1

GOVERNMENT plans to introduce a new form of tax through NSSA's proposed national health insurance scheme for all workers in what is seen as a desperate bid to help it fund the collapsing health sector.

The all-encompassing insurance scheme covering all categories of workers, observers say, is meant to boost government's revenues which have been badly depleted by company closures, the brain-drain, unemployment and galloping inflation.

Contribution to the scheme is compulsory whether one uses government health facilities or not. Contributors benefit from the supposed national insurance scheme only when they are gainfully employed.

Observers have said this negates the whole idea of a national insurance scheme as pensioners, the aged and the legion of the unemployed will not benefit.

The scheme was recommended to NSSA by government late last year and will be introduced in July. Workers will from July contribute to the fund for three months before they can start accessing services from government hospitals.

The plan is designed to augment the funding of public hospitals as normal financing from the fiscus is inadequate.

The money will be used to buy medication and fund the operations of all government hospitals, NSSA acting general manager Amod Takawira confirmed yesterday.

He said the plan was to "ensure that in time government concentrates on salaries and conditions of service for health personnel while NSSA deals with the procurement of drugs using money from taxpayers' contributions".

Preliminary calculations seen by the Zimbabwe Independent show that from July 1, every worker will be taxed 5% of their salary — capped at $130 000 — as their contribution to the health insurance scheme. Employers will match it with another 5%. This is in addition to the 3% that workers are already paying towards NSSA's pension scheme which is also compulsory.

NSSA will be responsible for vetting and registering government hospitals that can provide service under the scheme. It will then give the hospitals money for operations and medication in advance.

The new tax is an additional burden on workers and their employers who are already heavily taxed even though they get very little in return for their money.

Government this year narrowed the PAYE tax bracket in order to squeeze more money from the taxpayer. For instance, the highest tax bracket which was 35% last year has been hiked to 47,5% of income.

All workers including those who have their own medical insurance with companies such as Masca, Cimas and PSMAS will be forced to become members of NSSA's scheme to be introduced through a statutory instrument which government is already working on.

This means that all workers including those who earn less than the tax threshold of $100 000 will be forced to pay the 5% tax.

The statutory instrument, which will be presented to cabinet in early April, will require farm workers who earn $8 000 per month to become members.

"There is no choice, everyone has to pay even if you are on other medical schemes. It's national," said Takawira.

The medical cover will however apply only at government hospitals, although those who are privately-insured are compelled to contribute,which indicates that it is a fund-raising project for collapsing public health institutions.

Government hospitals are perennially short of drugs, skilled personnel and doctors.

"It will not cover private hospitals. The aim is to cater for your expenses when you visit say Parirenyatwa and Harare hospital," said Takawira.

The scheme, according to NSSA, will cover an employee and four dependants. It has no grading system to differentiate between service that can be received by members according to levels of contributions.

That means a farm worker who contributes $400 a month will enjoy the same benefits as a high earner who contributes say $6 500 to the scheme. The $400 is expected to cover the worker and his four dependants.

"Yes, that's the international trend, you take from the rich to give to the poor. There is nothing shocking about that," said Takawira, who has been in an acting capacity at Nssa for the past five years.

Takawira said the scheme will not cover workers after they retire while those who are retrenched or fired will only be covered for three months before they are struck off the scheme.

It does not cover thousands of pensioners who are getting a pittance from NSSA as monthly payouts because — according to Takawira — "they did not contribute to the scheme".

Significantly, the timing of the scheme coincides with the establishment of the Health Services Board which government said was meant to improve salaries and working conditions of health workers.

The striking junior doctors have questioned where the board would get the money when it did not get an allocation from the national budget for this year. Some companies and individuals have however vowed to challenge the scheme in court because of its compulsory nature.

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