Big4.com reports on KPMG survey where medical device manufacturing worries over new excise tax.

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Actions like price increases contemplated

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Big4.com, the premier social networking forum for professionals and alumni of Accenture, Andersen, BearingPoint, Capgemini, Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers, PwC has looked at the information from a new survey conducted by KPMG and noted that medical device manufacturing financial executives predict a new excise tax and the burden of its related compliance will hurt their bottom lines.

Almost forty percent of respondents are looking at actions like price increases and headcount, manufacturing processes, and other reductions to stay competitive.

Big4.com reports that as part of the Health Care and Education Reconciliation Act of 2010, health care providers manufacturing or importing medical devices or equipment for sale in the United States may be subject to a 2.3 percent excise tax. The KMPG survey notes that 60 percent believe this tax will increase their company’s tax compliance costs. Many have already decided to take countermeasures.

Twenty-two percent of respondents said their companies would consider increasing the cost of goods, while 13 percent said their organizations would likely make other cost reductions.

Adam Uttley, a KPMG tax partner focused on accounting methods, credits, and special projects commented on the situation
“Companies need to work across various functions to prepare for effective compliance, because this is not just a tax issue,” he said. “Although many may still be hoping for legislative relief, it would be prudent to assume that a first deposit of medical device excise tax will be due by January 29, 2013, and the first quarterly federal excise tax return will be due by April 30, 2013.”

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  •     Kristy Short

Big4.com
(734) 481-0186
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