News MiddleEast21 Jan 2018

Saudi Arabia:VAT pushes up healthcare costs

21 Jan 2018

The cost of healthcare services offered by the private sector has been rising slightly with the implementation of value added tax (VAT) since 1 January. While medicines, a key component in healthcare, are exempted, most of other medical services are being brought under VAT.

Hospitals, clinics, dental and eye care facilities and allied services in the private sector have started collecting 5% VAT from visiting patients, reports Saudi Gazette.

Insurance companies are paying the 5% VAT on the consultation fee, diagnostic and other clinical procedures on behalf of the patients but it is not clear how long they would do so.

The impact on dental, optical, cosmetic and fertility consultancy and procedure charges, which are not covered by insurance companies, are likely to affect patients.

Most people who visit hospitals for the treatment of diabetes and other chronic diseases face no problem with the new taxation.

According to experts, medical insurance premiums would certainly increase because the costs of healthcare providers are rising with most suppliers adding VAT on goods supplied to hospitals.

"Also, input costs of hospitals have been increasing due to the increase in costs of housekeeping and maintenance," a hospital source explained.


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