Hospitals Continue Charging 3% Health Equity Tax Despite Prime Minister's Announcement

Kathmandu. Despite Prime Minister Balen Shah announcing the removal of the three percent health equity tax, hospitals have been found to be charging patients extra fees. The Prime Minister had announced the removal of health and education equity tax through social media yesterday, Tuesday. However, patients who went to the hospital have complained that they are still paying the health equity tax. 

Patients complained that Hams Hospital, Báyodha Hospital, and others charged them extra fees. A patient told Ratopati, ‘I had to see an ENT specialist. I paid an extra fee for that.’ The hospitals stated that they had to collect the three percent because a written letter from the administration had not yet been received by the patients. Upon inquiry at the billing departments of the hospitals, it was found that most hospitals are still charging the three percent fee. 

Prime Minister Shah had said on social media, ‘It has been observed that the implementation of the 3 percent equity tax imposed on private education and health sectors, as per the current provisions, will lead to additional expenses and disappointment for the general public. Therefore, in consultation with the Honorable Finance Minister Swarnim Wagles, it has been decided not to implement the education equity fee and health equity fee for now. This government is a people-oriented government formed by the trust and expectations of the people. Our main objective is to establish good governance and ensure a quality life for all citizens. The purpose of introducing the 3 percent equity tax was to provide better education and health services to citizens in remote and backward areas, to support Dalit, marginalized, and impoverished children, to expand health insurance, and to mobilize the necessary financial resources for it. Furthermore, the goal was also to make the economy more organized by expanding the tax base.’

However, a law passed by parliament cannot be changed by the government's will. Therefore, there is a question of how the education equity fee and health equity fee, which have already become law, can be abolished simply by the Prime Minister's announcement. 

However, the Financial Act itself has a provision that allows the government to abolish the tax rate if it wishes. Section 18 of the Financial Act 2083 gives the government the authority to change taxes as needed. Sub-section (10) of that section states: ‘Notwithstanding anything written in the prevailing laws, the Nepal Government may, as per its necessity, reduce, increase, or provide partial or full exemption on the rates of duties, fees, charges, or taxes imposed under this Act or prevailing laws.’