The Department of Health, in collaboration with the National Treasury plans to establish thresholds for medical tax credits to redirect the estimated R34bn lost to the fiscus annually towards the NHI fund, reported Business Day (13 October 2025)
The eventual removal of medical tax credits is a core component of the NHI Act's funding strategy, but it will significantly increase the tax burden on medical scheme members, said Nicholas Crisp, the Deputy Director-General for NHI.
The State currently provides credits close to R34bn to members and beneficiaries of medical schemes. Once the [NHI] fund pays for those services, it would serve no purpose - in fact, it would be double funding - for the Government and the tax authorities to allow that money to be paid back, according to Crisp.
Katlego Mothudi, Managing Director of the Board of Healthcare Funders (BHF), noted the contradiction between Crisp’s recent affidavit submitted to the High Court, in which he states that the Government is not considering the removal of medical tax credits in the short or medium term and his recent statement in parliament confirming discussions are underway.
“This latest development unfolds against the backdrop of a highly controversial and legally contested NHI Act.
“The move to alter medical tax credits is the Government's first significant step in building the financial architecture for this contentious new system.”