Medical Tourism Remains Attractive Despite New Service Tax

malaysia’s Medical Tourism Sector remains Resilient Despite New Tax

August 4,2025

Kuala Lumpur – Malaysia’s thriving medical tourism industry is expected to weather the implementation of a 6% sales and service tax on foreign patients,according to the ministry of Health. The tax,which came into effect on July 1st,applies to private healthcare,traditional medicine,and allied health services provided to international visitors.

Health Minister Dzulkefly Ahmad stated that Malaysia will maintain its competitive edge in the regional medical tourism market. Despite the new tax, treatment costs in Malaysia remain significantly lower – between 30% and 40% – compared to neighboring countries like Indonesia, Thailand, and Singapore for key medical procedures including gastroenterology, cardiology, orthopaedics, and oncology.

the assurance comes following concerns raised by dr. Ahmad Yunus Hairi regarding the potential impact on Malaysia’s position as a leading medical tourism destination. In 2023, the sector generated over RM2 billion in revenue and welcomed 1.3 million medical tourists.

The finance ministry’s decision to implement the service tax affects service providers with a total taxable revenue exceeding RM1.5 million in the past 12 months.

Recent data indicates continued strong growth within the industry. In 2024, revenue from health tourism surged to RM2.72 billion, a 21% increase year-over-year. This growth was fueled by a 14% rise in international patient arrivals, reaching 1.59 million.

Minister Dzulkefly emphasized that malaysia’s appeal extends beyond competitive pricing, highlighting the country’s commitment to quality care, clinical effectiveness, and renowned Malaysian hospitality.

Tags: health, medical, tourism

Category: News

What percentage service tax is currently applied to medical tourism services in Thailand?

Understanding the New Service Tax & Its Impact

A recently implemented service tax on medical tourism has sparked debate, but the core appeal of seeking healthcare abroad remains strong. This tax, varying by country, typically adds a percentage to the overall cost of treatment. However, even with this added expense, notable cost savings can still be realized compared to healthcare costs in nations like the United States, Canada, adn the UK. The key lies in understanding where the tax applies, how much it is, and how it impacts the overall value proposition of international medical travel.

This article will delve into the specifics of the new tax, analyze its effect on popular medical tourism destinations, and outline strategies for patients to navigate these changes while still benefiting from affordable, high-quality healthcare. We’ll cover everything from affordable surgery options to dental tourism and beyond.

Popular Destinations & tax Implications (2025 Update)

Several countries remain frontrunners in the medical tourism industry. Here’s a breakdown of how the new service tax is affecting them:

Thailand: Historically a top choice for cosmetic surgery, gender affirmation surgery, and orthopedic procedures, Thailand has implemented a 7% service tax on most medical tourism services. Despite this, costs for procedures like hip replacements remain 50-70% lower than in the US.

India: Known for its advanced cardiac surgery, joint replacements, and increasingly, organ transplants, India has introduced a 12% service tax. Though, the base costs are substantially lower, making it a competitive option. Medical travel to India continues to grow, especially for complex procedures.

Mexico: A popular choice for Americans seeking affordable dental work, bariatric surgery, and cosmetic procedures, Mexico’s service tax varies by state, averaging around 16%. Proximity and lower travel costs offset some of the tax impact.Dental tourism in Mexico is particularly robust.

Turkey: Gaining prominence for hair transplants, eye surgery (including LASIK), and aesthetic treatments, Turkey has a 10% service tax. The strong Turkish Lira exchange rate further enhances affordability.

Costa Rica: Focusing on wellness tourism and specialized treatments like fertility treatments and orthopedic care, costa Rica applies a 13% sales tax, which includes a service component.

Critically important Note: Tax rates are subject to change.Always verify the current rate with your chosen provider and a tax professional before committing to treatment.

Cost Comparison: With & without the Tax

Let’s illustrate with a hypothetical example: a hip replacement.

| Country | Procedure Cost (USD) – Before Tax | Service Tax (%) | tax Amount (USD) | total Cost (USD) | % Savings vs. US (Estimated) |

|—|—|—|—|—|—|

| US | $40,000 | N/A | N/A | $40,000 | 0% |

| Thailand | $15,000 | 7% | $1,050 | $16,050 | 60% |

| India | $10,000 | 12% | $1,200 | $11,200 | 72% |

| Mexico | $12,000 | 16% | $1,920 | $13,920 | 65% |

These figures are estimates and can vary based on individual needs, hospital choice, and complexity of the procedure. The savings, even after the tax, are considerable.

benefits of Medical Tourism – Beyond cost Savings

While cost is a primary driver, medical tourism offers several other advantages:

Reduced Wait Times: many countries have significantly shorter wait times for elective procedures compared to countries with global healthcare systems.

Access to Specialized treatments: Some destinations specialize in specific treatments not readily available or approved in your home country.

High-Quality Care: many medical tourism facilities are accredited by international organizations like JCI (Joint commission International), ensuring adherence to global standards.

Combined Treatment & Vacation: Patients can frequently enough combine their medical treatment with a relaxing vacation, aiding recovery and overall well-being.

Personalized Care: Some facilities offer more personalized attention and concierge services than customary healthcare systems.

Practical Tips for Navigating the New Tax

Thorough Research: Investigate the tax implications in your chosen destination before making any decisions.

All-Inclusive Packages: Opt for all-inclusive packages that clearly outline all costs, including the service tax.

Compare Total Costs: Don’t just focus on the procedure cost; compare the total cost, including travel, accommodation, and the tax.

Consult a Medical Tourism Facilitator: Facilitators can provide expert guidance on destinations, providers, and tax regulations.

Check Insurance Coverage: Some insurance plans may cover medical tourism, possibly offsetting some of the costs.

Understand Refund Policies: clarify the refund policy in case