Putrajaya will absorb the cost of Goods and Services Tax (GST) imposed on drugs in public hospitals, Health Minister Datuk Seri Dr S. Subramaniam (pic) assured today.
He said that the healthcare services had many sectors within and not all are exempted from the GST except for services offered by the government.
"Even if the hospitals have to pay more for the drugs, this will not be passed on to the patients," he said in Putrajaya today.
Dr Subramaniam said that it is the private sector healthcare services component that needs more discussion.
"This is the issue we are now discussing. How to manage them (private hospitals) in relation to GST... we have to look at the best modules," he added.
The Segamat MP said he was also willing to have a discussion with DAP national publicity secretary and Petaling Jaya Utara MP Tony Pua over the matter.
"Tony Pua was referring to private hospitals, which is what we are also currently discussing about but I am willing to see him anytime to have a talk... we are open to it," Dr Subramaniam said.
"I did not say what he (Pua) said was wrong. He was talking from a factual point of view."
Pua had called Dr Subramaniam as "either ignorant or chooses not to be truthful" about what GST-exempt healthcare really means, explaining that a GST-exempt product or service merely meant that the consumption tax would not be imposed by the provider to the consumer.
He added however, that hospitals were still required to pay GST for all products and services they buy from their suppliers.
In a statement, Pua also gave an example of a hospital that buys a drug from the medical supplier for RM50 and sells it to the consumer for RM55 based on a 10% profit margin.
He said that when the GST kicks in, the hospital would have to pay the supplier RM50 plus 6% GST, amounting to RM3.
"If the hospital were to maintain the price of the drug to the consumer, then the hospital would only be making a profit of RM2 or a 3.8% profit margin," he said, adding that Dr Subramaniam was wrong to think that hospitals would absorb the consumption tax.
Dr S. Subramaniam, however, admitted yesterday that healthcare will be affected by a 6% GST but promised to minimise the effects and ensure affordable medical services.
This contradicted his assurance to Malaysians on Monday that healthcare was exempted from the GST, which will be implemented on April 1, 2015.
"Please be assured that the Ministry of Health will continue to play a proactive role in minimising the effects of GST on essential health services so as to ensure that all Malaysians, particularly those in the low income group will continue to have access to affordable healthcare," he said in a statement issued in Putrajaya.
He said that he was also continuously engaging with the Finance Ministry and "looking into all possible angles on how this can be achieved". - November 8, 2013.
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