GST: Private healthcare operating cost to rise up to 4 per cent

Private healthcare operating cost will likely increase from two to four per cent after the implementation of the Goods and Services Tax (GST) on April 1 due to mixed supply, said Pantai Holdings Bhd Chief Executive Officer Ahmad Shahizam Mohd Shariff.

He said for private hospitals not all supplies were exempted from GST as certain items that they get from contractors are under standard rated category which is subject to six per cent tax.

"There will be incremental cost as most of it cannot be passed on. Being hospital operators, most of the activities charged to patients are tax exempted, which means that there will be no claim back from the Royal Malaysian Customs Department (Customs).

"However, the increase of two to four per cent in cost is not big issue as it is fairly manageable," he told reporters on the sidelines of a briefing on Khazanah-IHH Healthcare Fund.

In addition to GST issues, Ahmad Shahizam said following a meeting between the Association of Private Hospitals of Malaysia and Customs this morning, private independent consultant fees had been clarified to be under standard rated supply and is subject to six per cent levy.

This was a burning question among the people in private hospitals previously on the clarity of the fees charged by private independent consultants who provide services in private hospitals, he said.

While most of the bills in private hospitals would be exempted from GST, the component relating to consultant fees would be subjected to the six per cent tax which will be levied to patients, he added.

On Khazanah-IHH Healthcare Fund, IHH Healthcare Bhd Managing Director and Chief Executive Officer, Dr Tan See Leng, said the fund was set up with RM50 million endowment from Khazanah Nasional Bhd, which was set aside from realised and targeted gains from its investment in IHH Healthcare.

Since it was set up two years ago, a total of RM20 million had been used to help more than 3,100 less privileged, deserving patients across the group's home markets of Malaysia, Singapore and Turkey, either partially or fully sponsored, he said.

Dr Tan said the fund will disburse RM10 million a year over five years through programmes run by IHH Healthcare subsidiaries, out of which 70 per cent had been allocated for Malaysia and the remaining to be split between Singapore and Turkey.

The fund was announced in July 2012 at the launch of IHH Healthcare initial public offering and the disbursement began in 2013 after the framework were put in place to systematically identify and match deserving patients.