NAIROBI, Kenya – The High Court has cast doubt on the constitutionality of mandatory deductions to the Social Health Insurance Fund (SHIF), raising questions about whether the 2.75 percent charge on salaried Kenyans amounts to unlawful double taxation.
While delivering a ruling on Monday, Justice Chacha Mwita said the deduction—applied to gross monthly income—is problematic in principle, since income tax has already been levied on the same earnings.
“It is unlawful to impose an additional deduction on income that has already been subjected to income tax,” Justice Mwita observed. “This amounts to double taxation and introduces a negative element that burdens taxpayers unfairly.”
Despite the sharp critique, the court struck out the petition challenging the SHIF levy, saying it would be premature to issue a ruling while similar cases are still pending before other courts.
The petition had been filed by three doctors, who also challenged the legality of transferring personal data from the defunct National Health Insurance Fund (NHIF) to SHIF without consent.
They further argued that the contributions were discriminatory, as higher earners pay more but receive the same benefits as low-income contributors.
The court noted that many of the issues raised had already been brought up in Petition E513 of 2024, which also questions the constitutionality of several health laws passed last year—including the Social Health Insurance Act, the Digital Health Care Act, and the Primary Health Care Act.
Regarding the NHIF-SHIF data migration, Justice Mwita ruled that the petitioners had not proven any constitutional violations.
He pointed out that Regulation 5 of the Social Health Insurance (Amendment) Regulations, 2024, provides legal grounds for transferring existing NHIF data to SHIF using government databases.
The petitioners had dismissed the regulation as an “afterthought,” but the court disagreed, saying no sufficient legal grounds had been presented to challenge its validity.
Justice Mwita concluded that it would be improper to make a determination on the matter until the ongoing legal challenges—especially Petition E513/2024 and an appeal currently before the Court of Appeal—are resolved.
“For the above reasons, this petition is struck out,” he said.
The ruling revives concerns about the structure and fairness of the SHIF model, which became operational in 2023.
That year, a three-judge bench had also declared the framework unconstitutional, citing lack of public participation and inequalities in how contributions were calculated.
Despite those rulings, both employees and employers have continued making contributions under the SHIF scheme.
