It is that time of the year and the Minister of Finance delivered his budget speech on 21 February 2018.
Herewith a summary of the tax proposals on medical fees tax credits:
The Income Tax Act (1962) provides a tax rebate (medical tax credit) for individuals.
The medical tax credit consists of two components:
- medical scheme fees for approved medical scheme contributions and
- additional medical expenses for out-of-pocket medical payments.
Government is concerned that some taxpayers may be excessively benefiting from this rebate, specifically in instances where multiple taxpayers contribute toward the medical scheme or expenses of another person (for example, adult children jointly contributing to their elderly mother’s medical scheme). Where taxpayers carry a share of the medical scheme, contribution or medical cost, it is proposed that the medical tax credit should also be apportioned between the various contributors.
Medical tax credits: Over the next three years, below-inflation increases in medical tax credits will help government to fund the rollout of national health insurance.
The updated benefit is stipulated in the table below:
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