An open letter to the Minister of Finance
Taxing the sick

by Amaradasa Fernando
All insurance companies charge a 20% Vat on Hospitalization Insurance. When I protested to the Sri Lanka Life Insurance Corporation, that they were fleecing the sick, I was told that they were helpless as this was a government budgetary requirement made in the last year’s budget. I pointed out the anomaly as no Vat was being charged on life insurance policies. The anomaly becomes more ridiculous when an individual purchased a life insurance policy which included two policy riders, critical illness and hospitalization, no Vat was charged on these two items of the policy. However, if one buys a policy per se with hospitalization health insurance with critical illness, one has to pay Vat @ 20%. This means that to if one wants to have only hospitalization insurance cover he is compelled to pay the burdensome Vat. If one wants to have both these covers he is compelled to go in for a life insurance policy. This is violating one’s fundamental rights as one should be able to chose what type of insurance one should buy. Adding insult to injury, the unkindest cut is that Vat rates, one at 10% and the other at 20%, the latter being imposed on medical insurance. Recently, when I went to a private hospital, I was pleasantly surprised to find that private hospitals were excluded from charging Vat, with is a salutary thing. Then one cannot see reason in imposing Vat on those self-employed persons who wish to enter the same private hospitals, because there is no National Health Scheme for them unlike government servants and those working in state corporations who have the privilege of medical insurance, for which the government pays by way of ETF.



Bleeding White

Government because of its depleted coffers wants to bleed white the citizen. I might have been a little more merciful to the sick by putting hospitalization health insurance on the lesser grade of 10%. The self-employed person has to fend for himself. He has to provide his own pension or provident fund for his own retirement and when he falls ill he has no decent hospitalization. Mostly those of the middle class self-employed buy hospitalization insurance because government hospital service leaves much to be desired. Apart from the woeful service in the non-paying wards, such as over crowding (floor patients), overworked rude attendants, nursing staff, and sometimes boorish doctors, who have no bedside manners, because they have no time for a few words of caring for the patient, as they want to run to see as many patients as possible in private hospitals. Beside all this, if one is so unfortunate as to have to been in a government hospital during a trade union strike by the three aforementioned services makes, woe be unto him. You may end up in the hospital mortuary because there may be no one to administer to you in your hour of need. You may yet not see the end of your troubles before your final departure from a government hospital, that is death. The mortuary attendants have the final say. They may be on strike, leaving a very unpleasant and smelly job for the undertaker!.

When such is the parlous state of our government hospitals, the self-employed middle classes, often get into debt to go to private hospitals in the hope of a better service, as the government because the government has failed them. I hope the Minister of Finance will take off the obnoxious Vat 20% from health insurance, or at least to bring it down to 5%. After all a few thousand hospitalization insurance policies is not going to cause a serious dent to the government exchequer? This is obligatory because the government has failed in duty by its inability to provide a National Health Scheme for the self-employed. I hope the Minister of Finance, Mr. Choksy will not receive my suggestion with the same disdain with a Nelsonian eye, that one is used to when such appeals are made to minister and the government bureaucracy.