MAY 2001-------------THE SOUTHERN AfRICAN JOUR AL D~ HIV MEDICINE

FINANCE
TAX IMPLICATIONS OF

HIV-CARE COSTS

To obtain a fixed percentage tax directive an IRP 3 should

be obtained, completed, and submitted to SARS.

FIXED PERCENTAGE TAX D1RECTNE

While the above method is one way to receive tax relief

retrospectively, there is another method of tax relief that
could enhance patients' cash fiow on a monthly basis.

For further information contact:

RA Parkes and Associates

PO Box 1533, Morningside, 2057
Tel: (011) 706-9138

Fax: (011) 463-8284

People on chronic medication usually take fixed doses of

regular medication, and therefore the cost of treatment
can be calculated for a full financial year.

In this case, people on chronic medication (including

treatment for HIV/AIDS) may apply for a fixed percentage

tax directive.

iMPORTANT INFORMATION

A PATIENT REMINDER

The following documentation should be submitted
simultaneously with the completed IRP 3 form:

• a copy of the patient's identification document
• a completed application form for a tax reference

number

• a completed IRP 3 form
• a doctor's letter confirming that the patient suffers

from a chronic disease

• a projection of all medical expenses for the full financial
year including medication, consultations and

investigations.

Patients need to obtain this document at the beginning of
the tax year, although SARS is lenient with applications

lodged after the first 3 months of the fiscal year.

it is essential that patients retain all health care expense

vouchers/receipts as all claims have to be substantiated at
the financial year-end by submitting an income tax return.

RETROSPECTIVE TAX REUEF

To lodge a claim the patient needs to submit the following

information:

• a copy of his/her identification document

• the employer's IRP 5 form

• all medical expense claims

• a fully completed ITll form.

While the 2001 budget speech did not address the HIV/AIDS
crisis in South Africa, some South Africans are really doing

their homework. For example, R A Parkes and Associates
have established how HIV-positive patients can obtain tax

relief from the South African Revenue Services (SARS). This
tax relief could make HIV-care costs more affordable.

Many HIV-positive patients and other individuals with

chronic illnesses are unaware thal they have a right to
claim medical expenses against their net remuneration.

Patients earning less than R60 000 per annum are not

registered as taxpayers and are therefore not required to
submit annual income tax returns. What they may not

know is that despite not being registered as taxpayers, a
claim can still be lodged with the SARS by completing and

lodging what is referred to as an ITll form.

Patients who have not claimed these expenses for a period

of 5 years may still lodge a claim as long as they are in
possession of their original relevant IRP 5 form and all

medical expense vouchers.

Medical expense claims should include the following:

• details of medical scheme contributions (subscriptions)

• excess health care costs not covered by the medical aid
• all incidentals, i.e. pharmacy bills not submitted to the

medical scheme

• travelling costs related to obtaining treatment
• other medical professionals' costs, e.g. nursing and

dietician.

Where a patient's net remuneration exceeds R60 000 per

year, he/she should register as a taxpayer with SARS and

lodge an 1T12 form.

The same documentation is required to lodge the IT12 form

(as outlined for the ITll form).