HONG KONG, Jan. 10, 2013 /PRNewswire/ -- Tax exemption statuses for several of Hong Kong's Private Hospitals are under examination after reports have been released that certain terms may have been violated. Hong Kong based insurance provider Kwiksure, chose to investigate this matter further.
Tax exemption statuses for several of Hong Kong's Private Hospitals are under examination after HK newspaper, the SCMP[1], has reported that terms may have been violated. A number of private hospitals are managed by non-profit religious organisations, and are exempted from tax on the premise that the work being carried out is charitable. With recent reports of this privilege being potentially abused, Hong Kong based insurance provider Kwiksure, believes there is a call to revoke the status of offending organisations.
On the 12th of December 2012, Legislator Chan Kin-Por raised the issue to the Government, urging it to "review whether private hospitals making huge profits should continue to be exempt from tax" and "to make sure the hospitals are really doing charitable work". In response, the Secretary for Food and Health Doctor York Chow, assured steps had been taken.
"To ensure the provision of quality healthcare services to patients, [the] Department of Health has formulated a Code of Practice for Private Hospitals, Nursing Homes and Maternity Homes in which the standards of good practices are set out for adoption by private hospitals," said Doctor Chow.
The Legislative Council of Hong Kong reported that Hong Kong private hospital profits are reaching as high as HK$400 million[2] annually, yet with large fiscal reserves in hand, Hong Kong residents are questioning if taxes ought to be introduced. There have also been compliance issues with several of the eleven private hospitals in the city whereby some have failed to submit reports, and others have completed expansion plans without submitting proper plan approvals and therefore never receiving the official grant from the Health Department[3], as reported by The China Daily.
Union hospital and the Sha Tin Institution, for example, were accused of using a loophole to procure cheap land to developers under the guise of public use. A HK$609 million premium was reportedly paid to build luxury residences on sections of the hospitals unused land, earning land developers a total of HK$3.5 billion by avoiding the tendering process. Union Hospital later denied any form of collusion, explaining that the HK$609 million premium was "reflected in the market price at the time".
Further to these compliance issues, Kwiksure has also discovered that there have been similar cases of controversy involving the legal provision of low fee beds in hospital wards. Instead of installing the required number of 100 lower cost beds, The China Daily reported that St Teresa's Hospital only arranged 58, all of which cost patients up to 50 percent more than other patients[3]. Another similar example of ignored requirements involved Hong Kong Baptist Hospital when the facility reneged on its promise to set up a Social Centre for the Elderly and Rehabilitation facilities, instead installing three floors of first class 'luxury' rooms.
There are now demands that the profits of private hospitals be kept under a much closer watch and remain strictly monitored. This should determine which private hospitals ought to retain their tax-free statuses, and which need to be ended.
Doctor Chow stated positively that developing private hospitals in Hong Kong would "enhance the overall service capacity and service quality of our healthcare system". Kwiksure feels this is a positive development and will continue to monitor the situation closely.
References:
[1] http://www.scmp.com/news/hong-kong/article/1082522/union-hospital-built-luxury-homes-its-land?login=1
[2] http://www.info.gov.hk/gia/general/201111/09/P201111090318.htm
[3] http://www.cdeclips.com/en/hongkong/Slam_on_private_hospitals/fullstory_76783.html
Sergio Ulloa
Phone Number: +852-3588-2979
Email: Sergio@kwiksure.com
