Patients in private hospitals not exempted from GST

Posted on 4 March 2015 – 08:48pm
Last updated on 5 March 2015 – 11:57am

Annie Freeda Cruez

PETALING JAYA: Professional fees charged by doctors in private hospitals for consultation will be subject to the Goods and Services Tax (GST) when it is implemented from April 1.

Under a new guideline from the Customs Department, the fees are not exempted from GST.

In disclosing this to theSun, Association of Private Hospitals of Malaysia (APHM) president Datuk Dr Jacob Thomas said initially they were told that healthcare will be in the “exempt” category as “they (hospitals) will not be able to claim input taxes on goods and services purchased.

“This sounded very kind and the proper thing to do. But the devil is in the details. This became obvious and clearer to private healthcare providers only in the process of implementation and the explanation which followed,” he said.

The shocking revelation came to light when it was found that in the Customs GST Guidelines of Nov 19, 2014, medical specialists were found to have been reclassified as “outsourced service providers”, in contrast to the same guideline dated June 25, 2014 where they were considered to be “joint providers of healthcare within the hospital”.

Thomas said APHM is concerned and shocked at the possible implications of GST which were never explained clearly to the people.

He said the term “exempt” is misleading and the rakyat are still under the impression that private healthcare costs are under the exempted category just as before.

“Classifying medical specialists as outsourced service providers is ridiculous as they are independent practitioners within a private hospital.

“It is even more ridiculous to say that because they are now categorised as outsourced service providers, their fees will be subjected to GST.

“We feel this is not a rational and fair way of enforcing GST.”

“If the government does not want to burden the rakyat, then medical specialists must remain categorised as joint providers of patient care with the hospitals, and stay in the exempted category as highlighted in the draft which was distributed to APHM on Feb 6,” said Thomas.

The reclassification of medical specialists as outsourced service providers, he said, has caused operational difficulties and some private hospitals are considering modifying their contracts and relationship with the specialists.

He said hospitals are considering various options in invoicing patients for services, with many invoices involved each time they seek treatment.

On the 2,999 drug items proposed for exemption under the National Essential Medicines list, Thomas noted that the list does not include many medications, including those for cancer, which are expensive.

“Medical devices which are not taxed now would also be taxed except for those in the exemption list to be decided and approved,” he said, adding that APHM has submitted a comprehensive list for consideration to Finance Ministry.

All outsourced services like security, housekeeping and laundry will be subject to GST, resulting in an escalation of private healthcare costs which is anticipated to be in the region of 5% or more.

“With so many unknowns, this is only an estimate. The increased cost of drugs, medical supplies, outsourced services will make hospital operations more expensive,” he said, adding that a patient’s bill which will not indicate a GST (except the doctor’s fee charged to the patient) will be much higher.

“The rakyat should not be told that prices will not see more than a 1% increase, when we know the increase will be in the region of at least 5%,” he added.

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Build Up Your Own Net Worth

In the last article, we talked about how to build up your personal budget. This week we are sharing with you how you can check your financial health through a very simple mathematics equation of: Equity = Asset – Liability

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Simple Steps To Build Up Your Personal Budget

Building up a Personal Budget to better managing your money. It is as simple as a mathematical equation of 1 + 1 = 2. Read the article below and you will instantly get a feel how to do it.

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Learn the beauty of interest and make money work hard for you!

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What Is The Smartest Way To Save?

People always been talking about saving. But, what is the smartest way to save? The answer is PAY YOURSELF FIRST. How? Come find out yourself and share with your friends and family.

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Set Goals To Live Your Dream

Everyone has a dream inside them. Lets find out how you can set SMART goals to make your dream materialize!

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Live Your Dream!

As parents, we should encourage our child to treasure their dream. We believe that every child is unique and they have a special gift in them. In the recent Money Smart Camp we organized, a few of my students shared they have never think of their dreams before except working hard for exam. I was very impressed by their Vision Board the next day. In fact, they have found their dreams and draw goals to work towards it. Hence, never too late to look for your dream!

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How To Build Up Your Child’s Investment Portfolio

On 23 May 2013, I was invited to BFM Business Radio Station 89.9 to share with the listener how to build up your child’s investment portfolio. You may download the podcast below. Topic highlights are:

  1. What are the rules you can educate your child before they go into any investment?
  2. How much is the investment aspect to be left to the child and how much involvement by the parents?
  3. How important it is to teach a child if they making a lost?


Salt for shoes?

Have you ask your kids before – what is money? Where its origin? Maybe you can share with them to clear their doubts…

Why People Face Money Woes

Dear Readers, I am honored to be invited by New Straits Times to contribute financial literacy article on a weekly basis. The article will be appearing on every Thursday in NIeXTER section. Let me share with you the first article published on 9 May 2013 – Why People Face Money Woes. Hope you enjoy it and share it out with your friends and family members.

Do subscribe to this FREE newsletter, and drop me an email if you have anything to share.Why People Face Money Woes

Needs vs Wants

UTAR Talk2 weeks ago, I was invited for a breakfast talk at Universiti Tunku Abdul Rahman, Petaling Jaya to share with the public and students to cultivate the good financial habits. Some parents shared with me that they were deeply concerned with their child spending habits. The younger generation are spending beyond what they could afford (or spend beyond their means).

You may be wondering why young people falls into excessive spending habit? The common reason is because many young people were brought up from a well to-do family, and they were not taught to differentiate between Needs and Wants. Needs is something that you can not live without, else you will die. Wants is a wish list. For instance, to fulfill our desire with good food, we can have a decent meal in a Kopitiam/Hawker Centre. However, some people choose to have it in a high end restaurant. Instantly the food bill goes up few folds. You may not know that – you are helping the owner to pay for the restaurant’s rental and renovation cost.

In this new information age, we must admit that we could not live without a mobile phone. Otherwise, we will feel handicap the whole day until we have the phone back on our hand.  Thanks to the seductive advertisement on Internet and media TV, everyone started to debate whether to get the new iPhone 5 or the new Samsung Galaxy 4. You could be very tempted to get a new smart phone and get rick of you current one which is still in very good condition. Before you do that, have you ever ask yourself whether do you really in need to change a new phone? Do you need a much faster processor and access to many apps, or you just want to look cool in front of people?!! How you want to live your life is entirely on your own, you can choose to live an extravagant lifestyle now, but an empty shell when you are old; or you can choose to live modestly and accumulate enough wealth to enjoy your life when you retire.

A friend of mine is a young and successful businessman. He used a 2G mobile phone. He shared with me that he loved his phone because the phone’s battery life can last much longer and the phone can do SMS. He always tell his kids to spend money on something that will appreciate in value and not something that will depreciate in value.  What differentiate between the rich and the poor one is because the rich understand delay gratification. So, start scrutinize your spending habits and spend wisely.

From Expecting To Getting Pregnant, Then Shop For Baby Stuff, And Baby Is Born

Back in 2010, one late evening when I was about to take a shower after long day at work, I decided to try my luck and took out the cheap pregnancy kit. I didn’t expect much after trying for a period of time. 3 minutes later, I was stunk standing at the bathroom door. I was talking to myself: ‘Can that be true? It is a positive result!’ I ran down to the living room and told my husband the test result. We looked at each other for a while. Then we started jumping. Then I said ‘Hmm… Dear, to play safe. Let’s do another round of test tomorrow to be sure’.

Next day morning I drove straight to the pharmacy and get a branded pregnancy kit to make sure the test result didn’t fool me. No doubt I was busy fire fighting in the office; I was anxiously waiting for the sunset to come so I could go home and test it again. When I got home, I ran to the toilet quickly. Then I came out and give my husband a cheeky smile. ‘Ahhhh! Yes, yes, I am expecting!’ I just couldn’t stop laughing. Instantly we felt that God is so great. I quite sure there were many first time Daddy and Mummy had the similar experience.

A week later, we went to the Gynaecologist at Subang Jaya Medical Centre (SDMC). Doctor said ‘Congratulations! You are expecting.’ We looked at each other and say ‘Yes, that is true. We are not dreaming.’ I will never forget that moment in life.

Throughout the pregnancy period, I felt it was a blessing that I did not crave for any special food. I heard story of the wife asking the husband drove hundred miles away just to taste the small town famous Ottak Ottak. There was also story where the husband was asked to get up at 4am, and buy her the famous Nasi Lemak.

Soon my stomach was 5 months big. We went for the ultrasonography check-up. The sonographer confirmed that it is a baby boy. ‘Wow, that’s great! We can start our baby shopping.’

We made some good bargain and we also learnt our mistake through our shopping trips.

  1. Baby cot – we bought a baby cot and a small portable baby cot which placed in the centre of ours’ bed. My son only slept on the baby cot for 10 seconds and started to cry non-stop. Since then, we never put him on the cot. Now, the cot is occupied by all my little Pooh Bear toys. The small portable baby cot is kept in the store room. Sigh! I told my husband that the next baby must sleep on the cot. We must discipline ourselves and mustn’t let the baby take advantage on us.
  2. Milk bottle and breast pump – we made our shopping in Singapore because it is cheaper by 20% compare to Malaysia. If you have friends and family coming from UK or US, you can ask them to get the electronic breast pump set. The savings can be as high as 50%, especially for Medela brand.
  3. Baby stroller and car seat – Mothercare offered good discount during sale. We bought the stroller and infant car seat for 30% off. Subsequently when my son was 8 months old, we bought a toddler car seat for 60% off. It is advisable not to get a big stroller, no doubt it looks more luxury and comfortable for the baby. But it could have limitation for your car’s luggage space. When you are traveling overseas, not all the taxis have big boot space to fit in your luggage and stroller.
  4. Toys – buy it during discount because kids’ toy can be very expensive. The same item can cost 50% more.

My son will be turning 2 years old next week. He has grown up from an infant to a toddler. He started to talk like a Parrot. Time flies and I enjoyed every moment I spent with him.  Share your experience with me.

Personal Cash Flow Planner

In a survey carried out in 2011 in the United Kingdom by POET (Personal Budgets Outcomes Evaluation Tool), it is revealed that personal budget have a positive impact on people’s lives. Meaning they are supported with self-respect, and in control of their finances.

To prevent yourself from falling the trap of credit card debt or excessive spending, picking up the skill in managing your personal budget or personal cash flow will not only avoid from building up debt, but it also gives you an overview of your personal financial position – Where are you today? How you want to live your life? Save money to live you dream; save money for investment.

Many people are intimidated by the idea of personal cash flow because it seems complicated. Actually it is just a simple mathematics equation. I have designed a Personal Cash Flow Planner template. All you have to do is to key-in the figures.

At the beginning, your financial position may not look good. When you get the result about where your money had spent, you will start to scrutinize and cut down on unnecessary spending. This will be your first step towards financial independence. Keep the good job and continue with this practice.

You will soon find there is some surplus at the end of the month. You could start to ‘Pay Yourself First’ and allocate a portion of your income into the Savings account (a general guideline of 10% of your total income) and ‘forget about it’ or don’t touch the money. Once you are consistently doing that, you will see that your account ending balance accumulating. In my books, I elaborate in detail how to build your Personal Income Statement that also lead you to read a company financial statement when you learn about investment in companies.

As the season of giving is around the corner, do your shopping wisely. Spend on meaningful gift instead of unnecessary gift. You do not wish that your gift end up on an auction site. I wish you a very Merry Christmas & Happy New Year 2013!

Gold Investment

In the recent years, few major banks in Malaysia have launched the Gold Investment Account. These include Maybank, Public Bank, CIMB Bank, UOB Bank, and Citibank. For those of you who are new to this financial instrument, it may be an useful information to help you to understand more about gold investment for retail investor.

The History Of Gold

  1. Around 50 B.C, people started to use gold as money to replace metal tools such as shells and rocks. People also use gold to make jewelery and gold coins. Slowly, gold had become an important trading instrument because it has an intrinsic value (value that that thing has “in itself”).
  2. Today, gold is still the most significant object that we continue to use gold for wedding rings, jewelery, Olympic medals, Oscars, Grammys, medical, aerospace, semiconductor, and money.
  3. Gold price always appreciate in value over the long term. You can see from the chart below. 20 years ago, it was US$252.80 in 1993. It is US$1,734.40 in Nov 2012. An increase of US$1,400.15 or 418.89% over 20 years.
  4. Hence, it is one of the best financial instrument to hedge against inflation and you can make a capital gain provided you buy and sell at the right price.

10 year gold price per ounce

How Can You Make Profit From Gold Investment Account?

  1. You buy in when the price is low and sell it when the price is high. The selling and buying price will be based on international gold price and the bank’s prevailing price quoted in RM per gram.
  2. For example, the bank’s selling price is RM165.30 per gram. You purchase 5 grams and it cost you RM826.50.
  3. When the price go up to RM174.71, you sell the 5 grams for RM873.53. Bear in mind that bank only buy back at buying price which is RM174.71. You make a gain of RM47.02 or 6%.
  4. Hence, before you make the decision to buy or sell, you have to look at the spread between selling and buying price. It is only a good sell if you sell at a much higher price than your original purchased price. You can refer to the scenario below.

What Are The Investment Risk?

  1. Pricing risk – gold buying or selling price will be based on prevailing world and local market conditions for gold, the exchange rate between US$ and RM and other market conditions
  2. Market risk – gold investment will be exposed to market forces or volatility. You may sustain losses if market conditions move against your favour.
  3. This is a non-protected product by PIDM.

What Are The Fees And Charges?

  • Maybank
    1. Minimum initial purchase of 1 gram.
    2. Subsequent purchase in multiples of 1 gram.
    3. Minimum balance in account of 1 gram.
    4. RM10 for stamp duty for agreement.
    5. Mode of operation – passbook and online.
    6. RM15 for loss of passbook.
  • Public Bank
    1. RM10 for quantity less than 10 grams as at 31 Dec.
    2. RM10 will be waived off if account opened less than 1 month.
    3. RM10 for stamp duty for agreement.
    4. Mode of operation – passbook and online.
    5. RM10 for loss of passbook.
    6. Physical gold can be withdrawn in denomination of 50g and 100g with fee charged on per piece basis – 50g (RM220-RM250), and 100g (RM240-RM270).
  • CIMB Bank
    1. Minimum initial purchase of 5 grams.
    2. Subsequent minimum purchase of 5 grams in multiples of 1 gram.
    3. RM5 annual fees if balance fall below 5 grams.
    4. RM10 for stamp duty for agreement.
    5. Mode of operation – passbook and online.
    6. RM20 for loss of passbook.
    7. RM10 for closure of account within 6 months.
    8. Physical gold can be withdrawn in denomination of 100 grams with RM1 charge per gram.
  • UOB Bank
    1. Minimum initial purchase of 20 grams.
    2. Subsequent minimum purchase of 5 grams in multiples of 5 grams.
    3. RM2 service charge per month if balance fall below 10 grams.
    4. RM10 for stamp duty for agreement.
    5. Mode of operation – passbook and online.
    6. RM15 for loss of passbook.


Teach Your Child About Credit Card

One best way to learn about credit card is by someone else’s example to get an idea of how easy it is to accumulate credit card debt and how hard it can be to get out of debt making only minimum payments.

William uses credit card for petrol and on holiday. When he gets home, he finds out that the total of all of his charges comes to $3,500. If he is unable to pay off the entire balance in a single on-time payment, how long will it take William to pay off the entire balance if he only settle for 5% minimum payment of $175?

The financial institution will charge 15% interest and that will cost $525. With the original debt of $3,500. It will take William 23 months to pay off the entire debt.

With enough credit card and enough credit card debt, it is actually possible to become economically trapped where you will never get out of debt. Hence, avoid going into debt for anything you don’t actually need.

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