Tax as an option to fund the proposed National Health Insurance fund: What do knowledgeable individuals think?

This research paper seeks to answer the question: What tax or combination of taxes knowledgeable individuals think the South African government can use as a potential source of revenue to fund the proposed National Health Insurance? The research methodology adopted is of an exploratory interpretive nature as it deals with the opinions of respondents. This methodology is well suited to the research process as the goal is to obtain and explore knowledgeable individuals’ opinions on what they perceive to be the best tax or combination of taxes which can be used as a potential source of revenue to finance the National Health Insurance fund. The method initially comprised a normative study, focusing on a literature review, the results of which were then used to create a self-developed questionnaire. This research aims to contribute to the body of knowledge which the South African government can consider when making a decision on a tax or combination of taxes as a possible method of financing. A sample of 91 people consisting of 40 tax practitioners (44%), 33 academics (36.2%) and 18 economists (19.8%) were asked to complete the questionnaire. The resultant data were subjected to various statistical analysis methods, including factor analysis, Kruskal-Wallis tests and Cluster analysis. The results reveal that (a) an increase in Value-Added tax is perceived as being justifiable, fair and efficient, while (b) an increase in taxes on individuals or an introduction of payroll taxes is not. The respondents suggest that funds be ring-fenced for National Health Insurance as this will increase accountability and prevent the funds from being expropriated during the budgetary process.