NHI will cause a tax revolt 

Discovery Health CEO Ryan Noach has warned that South Africa’s National Health Insurance (NHI) scheme will result in significantly higher taxes for taxpayers while reducing their healthcare entitlement by 72%, potentially leading to a tax revolt.  

The NHI Bill has been passed by the National Assembly, but there are no details on how the scheme will be funded. Noach argues that the tax increases required to fund the NHI are unfeasible. Estimates from Discovery Health and Intellidex suggest that the annual cost of the NHI could range from R300 billion to R460 billion.  

To raise an additional R200 billion for the NHI, conservative calculations by Discovery Health suggest increasing VAT to 21.5%, personal income taxes by 32%, or implementing a payroll tax equivalent to ten times current UIF contributions.  

However, these scenarios are deemed unfeasible and may lead to a tax revolt. South Africa’s small tax base, which funds most government expenditures, poses additional challenges for implementing the NHI. There are concerns that the NHI will drive medical professionals out of the country, exacerbating healthcare workforce shortages. 

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