Panafrican News Agency

Uganda plots 4% deductions on salaries to fund insurance scheme

Kampala, Uganda (PANA) – Uganda’s Cabinet on Monday approved the implementation of the National Health Insurance Scheme (NHIS) to have all Ugandans of majority age, except those who earn below a dollar a day, compulsorily contribute to the scheme, a government official said Tuesday.


Sarah Byakisa, a commissioner at the ministry of Finance, told a news conference that in its seating on Monday, the Cabinet approved the proposal to ensure increased access to medical services in the country. The measure, however, will have to be passed by the national Parliament if it is to take effect.


“A board of members shall be formed after the law has been enacted by parliament, which will accredit, regulate, monitor and supervise health care providers,” Byakisa said.


Salary earners, Byakisa said, will be charged 4% of their monthly incomes, collected at source, to fund the scheme. The non-salaried workers in the informal sector, she said, will be required to pay $30 a year.


The payment to fund the scheme, Byakise said, will exclude those who earn $1.5 or below in a day, persons with disabilities, and the elderly. All these people, including orphans and homeless, the official said, will be included on the beneficiary scheme.


“The scheme shall determine and register persons who qualify as indigents and therefore cannot contribute NHIS benefit package,” Byakisa said.


The proposal was made three years ago but was shelved due to opposition from especially the salaried class, who said they are already overburdened by taxes in a country where the average take-home pay is hardly $200.


Salaried workers already pay 30% of their gross income in pay-as-you-earn tax, and make a compulsory 5% contribution for social security, which the employers are required to top up with 10% of the employee’s gross salary to make a total social security contribution of 15% of the employee’s gross pay. The employees is entitled to access his social security contribution when he clocks 55 years of age, or his family claims if he dies prematurely.


The employers, according to the proposed insurance scheme, will top up the employee’s contribution with 1% of the employee’s gross salary – to make a total contribution of 5% per salaried employee.   

-0- PANA EM/VAO 25June2019