Tax matters

VAT on Vaccines!

Vaccines are now subject to the VAT rate of 5%. I find this odd and rather disturbing. The present government had negotiated a deal with the EU to have medicines (and food) zero rate until at least 2010, and until such time as other EU member states (Ireland, Sweden, UK) continue to enjoy this privilege. Why this sudden u-turn on such an important class of pharmaceuticals?

Whereas some vaccines are offered free by the NHS, others are not. Many were already pretty expensive even when they were exempt from VAT. VAT on vaccines will make these much less affordable, reducing the number of people who would otherwise have accepted to have them.

It is pertinent to state that modern medicine has been striving at reducing morbidity and mortality from illnesses by embarking on strategies aimed at prevention e.g. patient education, dietary changes, smoke cessation, screening for common malignancy and.... vaccination! Furthermore, vaccination is an effective means of limiting the spread of disease in the community. Indeed, it often is the only, truly effective measure, since contagious illnesses are spread before the effected person shows any signs of illness; sometimes, the person acts as a carrier and might not show any evidence of ill-health for several years (e.g. hepatitis; salmonellosis). Vaccination is, therefore, not only beneficial to the person being inoculated but essentially has a wider and more important role in limiting the incidence and spread of infectious conditions - in effect protecting other members of society. In other words, without vaccination, there is a very good chance of certain diseases, for which there is no effective cure, to increase in prevalence and to spread like wild fire on a wind day!

Consequently, this will invariably lead to:

·         an increase in the expenditure of the Health Department in providing treatment, under the NHS (National Health Service), for diseases that could have been prevented altogether

·         an increase in morbidity with the loss of several work-days to the detriment of employers and co-workers

·         a loss of income (and therefore less revenue for the IRD!!)

·         an increase in the demand for social security benefits - and

·         an increase in mortality.

 The introduction of VAT on vaccines is indeed

1. a short-sighted measure that is likely to cost the country much more than it can ever gain from its implementation and

2. a scandalous measure to boot - as it works counter to current medical endeavours to prevent disease!

Moreover, the government has breached the agreement it successfully negotiated with the EU, a self-imposed U-turn on the very issue that the government itself chose to negotiate! Maltese residents would rightfully feel betrayed by the introduction of this tax measure!