SOUTH AFRICA OFFERING TAX BREAKS FOR PRIVATE HEALTHCARE

South Africa's National Treasury is proposing tax breaks of around ZAR2.8bn (US$427.61mn) to ZAR3.8bn (US$580.34mn), to encourage greater medical scheme coverage among low-to-middle income earners.

Currently, around 7mn people in the country have private health insurance, out of total workforce of 29mn. However, this figure has remained flat for a number of years, with observers blaming prohibitively high costs.

Part of the problem is that employees involved in co-payment health insurance schemes with their employers are forced to pay taxes on their contributions. Under the new system, these taxes will be cancelled. In addition, self-employed individuals -- a large proportion of South Africa's workforce -- would be able to deduct medical contributions for the first time.

The government is keen to increase take-up of private health schemes in order to reduce reliance on the over-burdened public health sector. However, it is likely that health insurance will become more expensive for high-income groups.

Meanwhile, it has come to light recently that pensioners have been increasingly excluded from company health care schemes, a decision that is likely to have an effect on state-finances, as retirees are forced to rely on public provision.