NASSAU, BAHAMAS — Insurers say that while they welcome the government’s decision to defer the implementation of changes to the treatment of Value-Added Tax (VAT) on health insurance, the issue has been taken “off the table.”
Marcus Bosland, Chairman of The Bahamas Insurance Association’s (BIA) health insurance committee said: “The government has indicated and we first read it through newspaper reports that the planned change to the VAT rule that would affect health insurance is now deferred. We took that with some degree of jubilation. The BIA was in opposition to the planned change and we think it’s a good thing the government has decided to defer it.”
Still, Bosland added: “Deferred does not mean that it has been taken off the table. In a meeting they told us they are still considering this rule and will make what they hope will be a final determination as part of the budget. It could mean that this rule goes away and they allow the country to enjoy the status quo or it could mean that the rule would be introduced later this year as a part of the budget.”
The Ministry of Finance (MOF) has previously stated that the practice of insurers claiming VAT paid on payouts as inputs are not allowed in law. The Bahamas Insurance Association has contended that medical bills and treatment costs for thousands of Bahamians will increase due to the Ministry of Finance’s decision to stop insurers from recovering the 10 percent VAT paid on health insurance claims payments.
The BIA has also warned that the move will likely make healthcare less accessible and unaffordable for Bahamians – a claim the Ministry of Finance has dismissed. According to the Ministry of Finance, the government believes the impact of this change on the individual or group health insurance client would be insignificant.
Bosland said: “We think the current rule is fair. Our clients pay VAT on health insurance premiums as do many other clients on different products. We think the 10 percent burden they currently pay is adequate and no more should be asked of them or the insurance industry.”
