Sri Lanka to slap price controls after charging hefty VAT on hospital care

ECONOMYNEXT – Sri Lanka will charge a 15 percent tax on patients treated at hospitals owned by members of the community and price controls will imposed on their services, Health Minister Rajitha Senaratne said.

Under VAT added tax changes approved by the cabinet of ministers this week, sick people will have to pay a 15 percent tax to the state on their hospital bill.

But outpatient treatment, medical test and dialysis will not be charged taxes.

Minister Senaratne said price controls will soon be brought for hospital services.

"They will not be allowed to charge prices as they want," he said.

Sri Lanka has started imposing price controls on drugs and some drugs are now not readily available.

However Minister Senaratne had also taken steps to approve more drugs in some categories which has increased competition and reduced procurement costs for state hospitals.

Sri Lanka is one of the few countries that taxes health care heavily, raising costs of hospital care for the sick and elderly as much as 15 percent.

UK, Sri Lanka’s former colonial master, has zero rated health care. There are also no taxes on funeral services.

Politicians in Sri Lanka usually claim that they charge taxes to provide health care and education. (Colombo/Sept15/2016).





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