No more med aid tax deduction

November 21, 2011

The mooted medical aid capped deduction amount to apply from March next year has been changed to a tax credit applicable to all taxpayers other than those aged 65 or more, a tax expert cautioned on Tuesday.

A new medical tax approach was announced in the budget earlier in the year to replace the basic R720 and R440 basic deductions system, but a concern was that the proposed system may actually benefit wealthier people at the expense of poorer ones.

Ron Warren, tax expert and executive chairman of payroll software company NuQ, says a tax rebate will now be granted, instead of a capped deduction of medical aid contributions that is deducted from taxable income.

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