03 Aug 2026

Healthcare professionals, business leaders, trade unions and patients have opposed government’s proposed 14 per cent Value Added Tax (VAT) on private healthcare services.

They said the move will make access to healthcare impossible, pushing patients to congest at already overstretched public hospitals, undermining Botswana’s quest for universal health coverage.

Speaking during the National Tax Pitso convened by the Ministry of Finance in Tlokweng on Friday, the Botswana Doctors Union (BDU), representing nine healthcare professional organisations, said healthcare should never be treated as an ordinary commodity because illness was not a matter of choice.

Delivering the lead submission on behalf of doctors, pharmacists, physiotherapists, radiographers, optometrists, laboratories and other private healthcare practitioners, BDU vice president, Dr Thuto Victor said the proposed tax hike would ultimately be borne by patients.

“Healthcare is not an ordinary commodity. Illness is not consumption by choice. A patient is not simply a consumer,” he said, adding that people who seek medical care were often seeking to save life rather than making a normal purchasing decisions.

While acknowledging government’s need to improve revenue collection and address input VAT challenges faced by healthcare providers, Dr Victor said the proposed solution risked solving one problem while creating another.

Although standard-rating healthcare would allow providers to recover input VAT, he argued tax would inevitably be passed on to patients through consultation fees, investigations and treatment costs.

He warned that higher healthcare costs would force many people to delay treatment, stretch medication, postpone follow-up appointments or abandon private healthcare altogether.

Instead, healthcare professionals proposed for government to seriously consider zero-rating qualifying essential healthcare services.

Dr Victor explained that unlike exemption, zero-rating would allow healthcare providers to reclaim input VAT while ensuring patients were not charged VAT on essential consultations and treatment.

He further argued that government should distinguish essential healthcare services from elective procedures, therefore it would not be a wise move to apply one tax regime across board.

They further warned that taxing private healthcare would ultimately increase pressure on public hospitals as more patients would abandon private facilities because of rising costs.

Dr Victor said healthcare expenditure should be viewed as an investment in Botswana’s human capital rather than ordinary consumption, urging government to pause implementation of the proposed VAT and conduct a comprehensive health-economic impact assessment before making a final decision.

Echoing the doctors’ submission, Business Botswana health sector chairperson, Mr Moraki Mokgosana said the organisation appreciated the difficult economic environment facing government but believed taxing private healthcare would undermine both universal health coverage and employment creation.

He said Business Botswana had long advocated for zero-rating private healthcare services and has engaged both the Ministries of Health and Finance on the matter as far back as 2025.

According to Mr Mokgosana, the private healthcare sector, which includes hospitals, clinics, laboratories, emergency medical services, medical aid schemes and pharmaceutical companies, currently serves about 370 000 beneficiaries through Botswana’s four largest medical aid funds.

He said the introduction of VAT would force patients to dig deeper into their pockets to access healthcare while medical aid schemes would eventually increase premiums if they were to absorb the additional costs.

Mr Mokgosana warned that tax increase would discourage investment in private healthcare, threaten employment opportunities and drive more patients into the already overstretched public health system, ultimately increasing government’s own healthcare expenditure.

He maintained that zero-rating remained the most practical solution, arguing that even a patient paying P250 for a consultation would have to find an additional P35 in VAT before accessing treatment.

Botswana Federation of Trade Unions (BFTU) president, Ms Martha Molema and Botswana Public Employees Union (BOPEU) president, Mr Martin Gabobake urged government to return to the drawing board and undertake wider consultations with Batswana before implementing the policy.

Dr Gagoitsewe Saleshando also supported zero-rating, saying previous VAT charges on private healthcare had resulted in many patients returning to public health facilities as they could no longer afford private treatment.

He described VAT as an inequitable tax that disproportionately affects low-income earners, arguing that poorer households spend a larger share of their income on essential services.

Physiotherapist, Ms Nono Kgomotso equally concurred that introducing VAT on healthcare would inevitably force patients away from private practices and place an even heavier burden on government hospitals and clinics.

Patients representative, Ms Barati Phukuntsi questioned whether healthcare providers genuinely prioritised patients’ welfare, asking why consultation and treatment costs differ significantly between medical aid beneficiaries and patients paying cash.

“Do you really care about patients? What regulates your pricing?” she asked, while calling for honesty and greater transparency within the private healthcare sector.

Offering a different perspective, tax consultant, Mr Tumelo Ranna said zero-rating may not be sustainable because it was generally affordable only in wealthier economies.

He argued that exemption has already proved ineffective and proposed that government instead consider introducing a reduced VAT rate on healthcare services as a compromise between affordability and revenue collection.

BOFEPUSO secretary general, Mr Oreeditse Nyatso also expressed concern over rising medical aid premiums, saying members continue paying more while receiving diminishing value from their medical aid schemes.

Responding to the submissions, Vice President and Minister of Finance, Mr Ndaba Gaolathe thanked stakeholders for their frank contributions and assured them government careful attention.

“We are here to listen, and we listened,” he said.

Mr Gaolathe acknowledged that there was broad consensus that healthcare differs from other sectors adding that patients must remain at the centre of policy decisions, while timing and sequencing were equally critical.

However, he maintained that although many stakeholders supported zero-rating, current economic realities does not make the option practical.

Mr Gaolathe said all submissions made during the consultation would inform government’s final decision on the proposed VAT reforms. ENDS