Govt pays GST for subsidised patients

IN THE letter, 'Exempt hospital fees, medicine from GST' (ST, Jan 28), Mr Anthony Oei cited the Jan 21 reply in Parliament by the Ministry of Health, and suggested that the Government exempts hospital fees, medicine and medical-related equipment from GST.

As mentioned in the same Parliament reply, the Ministry of Health has been absorbing GST in full for all subsidised patients in public hospitals and polyclinics since 1994. For example, in 2005, when the GST rate was 5 per cent, the Government paid for the full GST at a total of $28 million. Last year, when GST was raised to 7 per cent, government subsidies to offset GST increased to $39 million, continuing to benefit subsidised patients.

Subsidised patients do not bear any GST cost, as it is borne entirely by the Government. Hence, GST did not raise the cost of subsidised health-care services.

Providing specific subsidies is a better approach than exempting all or any hospital fees and medicine from GST. This approach ensures that basic health-care services remain affordable to Singaporeans while at the same time maintaining our GST tax base. A broad-based GST scheme allows us to keep the GST rate low and the system simple.

The Government will continue to keep subsidised care affordable. There are schemes in place to help patients in need of financial assistance. No patient will be denied medical treatment due to an inability to pay.

Karen Tan (Ms)
Director Corporate Communications
Ministry of Health

Cheong Swee Ying
Chief Tax Policy Officer
Ministry of Finance