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Monday, 27 November 2017

The Universal Healthcare Act will impose a tithe on basic commodities and materials

LEGISLATION WATCH- The Universal Healthcare Act will impose a tithe on basic commodities and materials — and business is furious: It would appear that the healthcare sector is not the only industry that will paying a fee to help fund the state’s proposed EGP 600 bn health coverage plan. The law is also expected to charge a tithe for every tonne of cement and steel sold, in addition to a tax for every sqm of porcelain, marble and granite sold. Cement companies are expected to pay EGP 20 for every tonne, while steel manufacturers may see a EGP 50 tax imposed on every tonne sold. Producers of porcelain, marble and granite can expect to pay EGP 5 for every sqm sold. This applies for imports as well as locally produced goods, according to Article 40 of the law. We had noted earlier this month that the bill mandates a series of fees on the healthcare sector that range from EGP 10,000 to EGP 500,000 for various licenses and administrative filings.

Naturally enough, manufacturers are incensed, with some, including the head of the metallurgy industries division of the Federation of Egyptian Industries (FEI), telling Al Borsa that they plan to pass the costs of the taxes straight through to the consumer. Some companies are considering offsetting losses by importing and selling clinker (a raw material in cement manufacturing) in Egypt. Pharma companies have also quailed at the notion of having to pay into the fund, said Awad Gabr, member of the pharma division of the FEI. Many object to the blanket set fee of EGP 500K imposed on new healthcare companies regardless of their size.

Tell us again how paying tax is optional? The chair of the House of Representatives’ Health Committee Mohamed Al Ammari warned that universal healthcare will be derailed if businesses refuse to pay taxes imposed under the act. The committee is expected to hold further hearings on the law with Health Minister Ahmed Rady today, and will study the recommendations of the Medical and Pharma syndicates, Al Ammari added. The committee had given its preliminary approval of the act earlier this month.

On a related note, it appears that the law has given Egyptian expats the ability to opt out of the new healthcare system, a choice not afforded to residents. The Egyptian Council of State (Maglis Al Dawla) had apparently flagged the provision as violating the constitution, which mandates the right to healthcare for all Egyptians, council member Abdel Razzak Mahran tells Al Shorouk. It is unclear if the option had been scrapped from the draft sent to the House of Representatives.

We have mixed feelings about socialized medicine, but our bottom line is simple: If you can look away for the moment from the inevitable execution gaps — and forget, for an instant, that the devil is in the details — the notion that every citizen should have a right to quality healthcare is one of those “once in a generation” policy moves for which the Ismail government should get credit. In a nation as scarred by poverty and disease as is ours, their ambition is laudable.

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