Discovery Card Vitality Miles & Contributions towards the cost of airtickets. Is one allowed to Claim the full cost of the air ticket or if the amount paid is reduced by use of Discovery Miles and Discovery Vitality Contribution, may you only put through
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
In terms of section 6A(i) of the Income Tax Act, the “medical scheme fees tax credit applies in respect of fees paid by the person to … a medical scheme registered under the Medical Schemes Act”.
The medical scheme must be registered under section 24(1) of this Act. In terms of that Act, “unless inconsistent with the context … “business of a medical scheme” means the business of undertaking liability in return for a premium or contribution -
-
to make provision for the obtaining of any relevant health service;
-
to grant assistance in defraying expenditure incurred in connection with the rendering of any relevant health service; and
-
where applicable, to render a relevant health service, either by the medical scheme itself, or by any supplier or group of suppliers of a relevant health service or by any person, in association with or in terms of an agreement with a medical scheme; …”
We submit that, to the extent that the premium or contribution to the fund includes amounts in respect of other benefits, it would not to make provision for the obtaining of any relevant health service or to grant assistance in defraying expenditure incurred in connection with the rendering of any relevant health service. To that extent it would then also not be an amount qualifying as a contribution for purposes of section 6A.
The taxpayer is best advised to use the amount recognised as contributions on the certificate obtained from the medical scheme when the return of income is completed.