Dr. Herbert Luswata, the President of the Uganda Medical Association
Healthcare providers have expressed concern over a move by the Uganda Revenue Authority (URA) to start taxing consultants and medical specialists who are part-time in private hospitals as full-time employees.
In a notice seen by our reporter, the tax body asks hospitals to amend their already filed Pay as You Earn (PAYE) tax returns to include part-time medical workers who have hitherto been remitting a six per cent withholding tax off the allowances they receive from these hospitals.
While efforts to obtain a direct comment from both Sarah Chelangat, URA’s Commissioner in charge of Domestic Taxes and Robert Kalumba, the Manager of Corporate Affairs were futile, the notice to hospitals shows this decision was premised on among others the fact that specialists do not bear any financial risks or make investments in the work that they do and that they are entitled to an ascertainable remuneration consistently.
However, sources expressed concern that this is only another case of double taxation as many of the specialists are moonlighting, already employed by the government and are already remitting the tax at their full-time workstations.
Dr. Herbert Luswata, the President of the Uganda Medical Association says the majority of these specialists are government health workers who go to private hospitals to offer a service after their duty hours.
Other than just sending directives to hospitals, he says URA needs to offer clear guidance on how they will verify the number of patients consultants worked on in a month since many are paid per patient handled and these are not constant.
For Luswata, the only choice now is for private hospitals to formally employ these medical works and offer them contracts that URA can base on for taxation.
Grace Kiwanuka, the Executive Director of the Uganda Healthcare Federation, an umbrella body that brings together private healthcare providers, says this option is affordable by only a few hospitals as those employed by the government are offered a salary of more than ten million shillings per month.
She worries this will further stress such private hospitals into costs that will eventually be pushed to patients further raising the cost of care and limiting access to specialist services.
Kiwanuka says it’s concerning that URA has been accepting hospitals to file withholding taxes for specialists and is all of a sudden coming out now threatening to penalize providers.
Kiwanuka, says that this liability is targeting the wrong party by putting the burden on hospitals yet they have TIN numbers of specialists and can always deal with them directly. She notes that URA ought to have been aware of this move rather than asking hospitals to amend already submitted returns.
Previously, according to the URA guide to taxation of health workers and the medical sector, part-time specialists were required to remit a six per cent withholding tax for resident doctors and fifteen per cent for non-residents.
-URN
