SINGAPORE: As the city-state’s population starts to age and adopt unhealthy lifestyles, one in four Singaporeans over the age of 40 now has at least one chronic disease. Rising medical costs have hampered access to healthcare treatment, and Deloitte Singapore believes that this should urge employers to provide more healthcare benefits for their employees.
The accounting and consultancy firm recommends increasing the cap on tax deduction for medical expenses. It argued that in order to support employees in managing chronic diseases, expenses incurred on preventive health screenings and the like should be fully deductible.
It stated that it is very timely for the government to relook its objectives of the cap on medical expense deductibility and determine whether the current cap has impaired the provision of medical benefits to employees due to healthcare costs rising much faster than wages, and whether this should be given a higher priority than a worry on the over-consumption of medical services in the long run.
As an alternative to raising cap, Deloitte said the government could consider excluding expenses relating to preventive health screening and/or the management of chronic diseases from the definition of medical expenses.
“Introducing such exceptions may, in the long run, be a revenue neutral exercise on the premise that preventive health screening/management of chronic diseases should lower the overall costs to employers on the provision of health care, while simultaneously improving productivity and promoting a healthier lifestyle,” Deloitte explains.
More so, it suggested that the government could also consider giving a double tax deduction on employer’s Medisave CPF contribution for employees above the retirement age.
“Incentives should be provided to employers that hire older Singaporeans in their workplace; this may include allowing a double deduction on Medisave contribution to CPF for older workers. In addition, to encourage individuals to take responsibility for healthcare needs, the Government should consider granting personal relief for premiums paid for medical insurance,” Deloitte Singapore and Southeast Asia tax partner and leader of global employer services Jill Lim said.