Monday, August 23, 2010

Hospital fund tax is a sick decision

Sunday Nation 22 August 2010

In the late 18th century, someone in the then American colonies coined a catch-phrase that has survived through the years as a clarion call for democracy and representation.

The Americans, protesting against the principle of being taxed by the “mother” country without having any say in the way they were governed or how the tax money was used, cried out that there should be “no taxation without representation”.

Most modern democracies now provide that all taxes on their citizens must be approved by their elected representatives, and that any use the money is put to must also be approved in a similar fashion.

This is the philosophy behind the annual budget ritual in Kenya and other similarly governed nations.

It has also lately become the basis for the international push for true universal suffrage where all people that are eligible to pay tax in a particular jurisdiction are also entitled to vote for their leaders.

Presumably, this is the same reasoning that recently drove a Kenyan court to assert that even prisoners have a right to vote at the referendum, and even at future General Elections.

It is, therefore, a grave anomaly that in this day and age, there exist certain organs of state that have the power to tax Kenyans and decide how that tax money is used without approval from parliament.

The recent decision by the National Hospital Insurance Fund to increase the monthly membership “contributions” by over 600 per cent has served to open the eyes of Kenyans to this anomaly.

Whether it is allowed by law or not, how can an institution unilaterally decide how much money to deduct from a worker’s payslip without negotiating with the worker or an elected representative?

How can the same institution have the power to vary those deductions without a process of consultation involving the workers or their representatives?

It is insufficient to argue, as the hospital fund has done, that workers and other “stakeholders” are adequately represented on the organisation’s board.

The increased deductions will not only affect the members of the “stakeholder” organisations, and it is imperative that a process of consultation involving the peoples’ elected representatives be used to determine the amount of money anyone should pay to NHIF.

The benefits must similarly be audited both by Parliament and by the government’s own auditing mechanisms to ensure that it is commensurate with the payments and that it is sustainable in the long run.

As matters stand now, the hospital fund has only indicated to workers through the press that their deductions will increase beginning next month.

Nobody in formal employment has received any direct communication asking for their opinion on this increase.

In any case, it is being argued that the increased rates are much higher than those offered by private insurance companies for similar insurance cover.

If the law allows the National Hospital Insurance Fund to make such unilateral decisions, then it is bad law inasmuch as it lets a government institution impose extra taxation on Kenyans without parliamentary approval.

In my opinion, it is imperative that the directive be rescinded pending a more consultative method of determining deductions and benefits.

Dr Lukoye Atwoli is a consultant psychiatrist and lecturer at Moi University’s School of Medicine

No comments:

Post a Comment

Say something about this post!