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Non-Communicable Diseases

The case for gym membership tax rebates

17 December 2019

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Employees were less likely to make healthy changes so long as they considered themselves to be in good health.

OPINION

It is ironic that despite 62% of 11,551 employees in Malaysia in 2018 saying they were in good health, 91.7% of respondents in that same survey were not eating a healthy diet while 45.9% were physically inactive.

Another interesting point in AIA Vitality’s Malaysia’s Healthiest Workplace 2018 report was that these employees were less likely to make healthy changes so long as they considered themselves to be in good health.

This last finding probably might strike a chord with those who find Malaysia’s infamous status as a fat country laughable, as well as a serious concern. It may also make some question what can be done to make Malaysians take greater care of their health, and what it will take to give this nightmare a happy ending.

The answer, funnily enough, lies in the question. Making people think they are unhealthy enough will, as the science here shows, make them change their ways for the better. Making them think that they will benefit should they take on a particular health programme or lifestyle, or providing incentives, will directly encourage them to change their ways.

Hence, the government would do well to provide incentives for preventive health measures. It can give tax rebates for gym membership, for example, or subsidise the purchase of dietary supplements as well as health devices like glucose monitors or fitbits. After all, it is only a positive development for Malaysia should its citizens become healthier and fitter.

Having the government incentivise things like gym memberships is not something uncommon or which no other country has adopted. The United States, for example, in 2018, passed legislation that allows gym memberships and workout classes – think Crossfit or Soulcycle – to be applied towards the broader medical tax deduction.

Under the Personal Health Investment Today Act or PHIT Act, taxpayers who itemise their deductions could add qualified sports and fitness expenses to qualified medical expenses. These include health club memberships, fitness equipment, exercise videos, and youth sports leagues.

It has been reported that PHIT will help Americans save 20-30% on yearly expenses related to physical activity, should the bill pass the US Senate. It is, therefore, not a surprise to note that PHIT has bipartisan support in both the US House of Representatives and the Senate, something rare, no doubt.

How can PHIT provide a return on investment to the government? By reducing $117 billion in healthcare costs yearly, $2.3 trillion which would otherwise been spent diagnosing and treating preventable chronic diseases and $42 trillion from projected total costs of chronic diseases in America. This is particularly inspiring as US kids are said to come in 47th place out of 50 when comparing global fitness results.

And how much would such a miracle-bill cost? An estimated $2.5 billion dollars over 10 years, according to a 2014 estimate. While the IHRSA claims that this cost will be more than offsetted by healthcare savings derived from Americans becoming more active, the idea of a large reduction from the estimated $75 billion the US spends yearly on physical inactivity-related medical costs, would certainly be worthwhile.

Subsidising glucose monitors or giving a tax rebate for gym memberships may not guarantee that more people will exercise or stay healthy, but it will certainly give people a reason to get on board. And as a body that has the ability to set tax policy, and would certainly benefit by having healthier citizens, it makes little sense not to proceed.

In any case, having incentives for such initiatives won’t be only for the government to see that it works out. Allowing tax deductions for gym and exercise expenses could encourage employers to reimburse their employees, or offer their own wellness programmes, at no burden to the government.

Some employers may provide workplace wellness programs – such as is the case for civil servants with the “X-break” programme for civil servants as mooted by Health Minister Dzulkefly Ahmad. But most do not reimburse or have gym programmes in place for their staff. Having incentivised programmes in place would also directly encourage those not using a gym to get on board, and those already using a gym, to stay for the long run.

Despite the government’s oft-repeated “no money” line it sings, it will obviously be in the country’s best interests if the government incentivises preventive health measures to help make Malaysians healthy. Prevention is better than cure, as the saying goes. Only in this case, being smart about prevention is better than cure, something that any government will think twice about.

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