Acts Online
GT Shield

National Health Act, 2003 (Act No. 61 of 2003)


National Health Insurance Policy towards Universal Health Coverage

Chapter 7 : Financing of NHI

7.5 Options for public funding of NHI

7.5.2 Surcharge on taxable income


228. A surcharge on taxable personal income is a further option for financing NHI. The current personal income tax structure is progressive, beginning with a marginal tax rate of 18 per cent and increasing to a maximum marginal rate of 40 per cent – raised to 45 per cent with effect from the 2017/18 tax year. Taxable income is calculated as gross income minus allowable deductions (including business expenses and contributions to retirement funds). Gross income includes income from employment and capital income (interest and profits in the case of unincorporated businesses). A personal income tax surcharge would be administratively feasible in South Africa as it would be based on a well-established system.


229. A higher overall personal income tax burden would impact on the disposable income of households and could be phased in with due regard to its impact on consumption expenditure and economic activity.


230. Australia introduced a surcharge on taxable income, known as the Medicare Levy, when the Medicare programme was started in 1984. It is a supplement to other tax revenue which enables the government to meet the additional cost of providing a prescribed set of health benefits for the whole population, whereas the previous system was limited to subsidies for healthcare to groups with low incomes. However, the general tax revenue remains as the main source of funding for publicly funded health services in Australia.