Will tax exemption on hospital equipment revive ailing health sector?

The 2016/2017 financial year is upon us. Often times, the reading of the new budget comes along with changes in the tax regime.

One of the big changes in the new tax regime is the scrapping off of Value Added Tax (VAT) on incinerators for use in hospital will be exempt from taxes, thanks to amendments to the fifth schedule of the East African Community Customs Management Act 2004. Refrigeration equipment for dead bodies for use in hospital, city council and funeral homes will also be exempt from tax from July 1.

There was good news too for manufacturers. Some heating, ventilating and air conditioning equipment for pharmaceutical manufacturers in Uganda will also be exempt from tax. This measure is aimed at helping Uganda produce drugs that can match global standards.

Excise duty on specialized hospital furniture has been removed while for other furniture; duty remains unchanged from the 2015/2016 financial year.

Geoffrey Ochieng of Alleluyah Medical Centre in Abim district says the tax changes are a welcome boost to the health sector.

"The new measure is welcome news especially for private healthcare providers like us who work in remote places where people do not have a lot of money. This will reduce on our costs," he says.

"I also urge government to support private health facilities in rural Uganda with equipment such as malaria and HIV testing kits so that we are able to provide some free medical services to the population."

Elijah Nsobya of Ffumbe Clinic in Mpigi says government should continue in such breathe to boost the health sector.

"The VAT exemptions on the equipment are welcome. Even the manufacturers have benefited, so this all bodes well for the consumers. My prayer is that these exemptions are not only temporary," he says.