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Medical tax credit

Medical Scheme Fees Tax Credit
Effective 1 March 2012 onwards, the income tax deductions for medical scheme contributions for taxpayers below 65 years will be converted into a medical scheme tax credit.
This new tax credit system seeks to bring about greater fairness and achieve greater equality in the treatment of medical expenses across income groups. All taxpayers will derive an equal tax benefit for their medical scheme contributions because the tax credit is a fixed amount.

The medical tax credit will be offset against tax payable. It will replace the tax deduction that was granted for medical scheme contributions, and is applicable to a person or a dependant with or without a disability.

The medical tax credit does not apply to a person who is 65 years and older. Such persons are still entitled to the full medical scheme contribution paid as a deduction. The net effect on such a person’s tax due is therefore nil.