Healthcare

Impact on Healthcare

Reclassification of Taxable Goods for Specialized Hospitals:

• The Finance Bill 2024 proposed reclassifying taxable goods intended for direct and exclusive use in the construction and equipping of specialized hospitals with a minimum bed capacity of fifty from exempt status to standard rated. This would increase the cost of constructing and equipping such hospitals, potentially raising the cost of healthcare services​.

Introduction of VAT on Health Insurance:

• The bill included a proposal to impose VAT on insurance and reinsurance premiums, which would have increased the cost of health insurance, reducing accessibility for many Kenyans​​.

Committee Recommendations:

Maintain Exempt Status for Specialized Hospital Equipment:

• The Finance and National Planning Committee recommended deleting the proposal to reclassify taxable goods intended for specialized hospitals from exempt to standard rated. 

• The Committee emphasized that affordable healthcare is essential and that maintaining the exemption would support the government's agenda for universal health coverage​.

Exempt Insurance and Reinsurance Premiums from VAT:

The Committee proposed deleting the clause that imposed VAT on insurance and reinsurance premiums. It was noted that this would help cushion Kenyans from the high costs of insurance, which is already underutilized, and maintain the affordability of health insurance.

Support for Preventive Healthcare Products:

The Committee recommended zero-rating locally manufactured micronutrients, foliar feeds, bio-stimulants, and mosquito repellents to promote preventive healthcare. This would make these products more affordable and support the reduction of disease transmission from animals to humans.

Encouraging Local Manufacturing:

The Committee also proposed supporting local manufacturers by maintaining exemptions on inputs and raw materials used in the production of healthcare-related products. This would boost local industries and ensure the affordability of healthcare supplies​​.