Health Minister Datuk Seri Dr S. Subramaniam has confirmed that there will be an increase in private healthcare costs after the Goods and Services Tax (GST) is implemented next April. — AFP pic

PUTRAJAYA, Dec 17 — Health Minister Datuk Seri Dr S. Subramaniam confirmed today that the cost of private healthcare will increase after the Goods and Services Tax (GST) is implemented next April, but said details on the rates are still being fine-tuned with the Customs Department.

Asked for an estimate, the minister told a press conference here that several figures are still being bandied about during the discussions and no final decision has been reached as yet.

“In this game, we are on the side of the medical community and we will continue representing their interest.

“At this moment in time, I cannot deny that there will be an increase in (private) healthcare costs, but what will be the percentage is left to be seen as there are varying figures given to us.

“According to the GST agency, it will be one to two per cent but according to private hospitals it will be five,” he told reporters at his ministry here.

Dr Subramaniam was responding to a statement by the Association of Private Hospitals of Malaysia (APHM) two days ago, which warned the public to be prepared to pay an additional five per cent for private hospital services after the GST is implemented in April, claiming the Customs Department has refused to exempt the tax for the private doctors they hire.

According to APHM president Datuk Dr Jacob Thomas, the group has already explained to the department that almost all private doctors are independent consultants who have very close working relationships with the private hospitals, unlike medical officers in public hospitals who are employees of the places they work at.

APHM said in this relationship, private doctors are not “outsourced services” as the services are jointly provided by both, but alleged that the Customs refused to revise its policy for private hospitals.

Dr Thomas also claimed as inaccurate, the statements made by Deputy Finance Minister Datuk Ahmad Maslan and Dr Subramaniam in the past that there will be no increase in private healthcare cost after GST as healthcare services are deemed to be an “exempt supply” sector.

He said that this was because private doctors working in private hospitals are considered by the Customs Department as “outsourced services” and their services will be charged with the six per cent tax.

This Dr Thomas said, will then be passed on to patients seeking treatment.

Explaining further today, Dr Subramaniam told reporters that he has already highlighted the matter to the GST agency, labelling it as a “peculiar problem”.

“They (GST agency) did not understand the concept, but I did explain that this is a very peculiar problem faced in a private hospital set-up,” he added.

The minister added that there is already a general proviso in place which stipulates that any company that provides a service within a system is considered an outsourced service.

“Whereas what a lot of doctors and private hospitals do is that they create companies just to manage their accounting,” he added.

Dr Subramaniam said that as highlighted by APHM however, the private medical practitioners are actually working within the premises of the private hospitals, adding that the matter is an issue of “understanding”.

“We have explained this to the GST team and the private hospitals have also explained it, so we have to wait for the decision from the Finance Ministry and the Customs as to what is the best approach.”

Malaysia is slated to implement the six per cent GST starting April next year, which is expected to raise the prices of most items.

However, the federal government previously claimed that healthcare costs would stay low as many regularly-used medicines will be exempted from the new tax.