NAIROBI, Kenya – The Kenya Revenue Authority (KRA) has announced that contributions to the newly launched Social Health Insurance Fund (SHIF) are currently not eligible for tax relief, a clarification that affects millions of Kenyans adjusting to recent changes in health insurance legislation.
In a statement issued Friday, KRA explained that the Income Tax Act allows for tax relief on health insurance contributions under the now-repealed National Health Insurance Fund (NHIF).
However, the new Social Health Insurance Act, which established SHIF, does not yet support similar tax relief provisions.
“The relief as provided refers to the NHIF under the National Health Insurance Fund Act, which was repealed by the Social Health Insurance Act,” KRA stated.
This clarification highlights a gap left by the transition from NHIF to SHIF, leaving taxpayers without a deduction for SHIF contributions under the current tax framework.
The KRA noted that contributions to SHIF remain ineligible for tax relief until further legislative changes are made.
The proposed Tax Laws (Amendment) Bill of 2024 aims to address this issue, introducing a provision that could enable taxpayers to deduct SHIF contributions from their taxable income if the amendment is passed.
This would align SHIF with the benefits NHIF contributors previously enjoyed, potentially offering financial relief to SHIF members.
The shift to SHIF is part of a wider healthcare reform under the Social Health Insurance Act, which repealed NHIF to enhance the accessibility and quality of healthcare in line with the government’s Universal Health Coverage (UHC) agenda.
The new fund is designed to address limitations of the NHIF, aiming for more effective coverage and benefits for Kenyans.
The KRA’s notice urges citizens to stay informed about the evolving tax policies affecting healthcare contributions, as legislative developments may further impact tax relief eligibility in the coming months.
In a statement issued Friday, KRA explained that the Income Tax Act allows for tax relief on health insurance contributions under the now-repealed National Health Insurance Fund (NHIF).
However, the new Social Health Insurance Act, which established SHIF, does not yet support similar tax relief provisions.
“The relief as provided refers to the NHIF under the National Health Insurance Fund Act, which was repealed by the Social Health Insurance Act,” KRA stated.
This clarification highlights a gap left by the transition from NHIF to SHIF, leaving taxpayers without a deduction for SHIF contributions under the current tax framework.
The KRA noted that contributions to SHIF remain ineligible for tax relief until further legislative changes are made.
The proposed Tax Laws (Amendment) Bill of 2024 aims to address this issue, introducing a provision that could enable taxpayers to deduct SHIF contributions from their taxable income if the amendment is passed.
This would align SHIF with the benefits NHIF contributors previously enjoyed, potentially offering financial relief to SHIF members.
The shift to SHIF is part of a wider healthcare reform under the Social Health Insurance Act, which repealed NHIF to enhance the accessibility and quality of healthcare in line with the government’s Universal Health Coverage (UHC) agenda.
The new fund is designed to address limitations of the NHIF, aiming for more effective coverage and benefits for Kenyans.
The KRA’s notice urges citizens to stay informed about the evolving tax policies affecting healthcare contributions, as legislative developments may further impact tax relief eligibility in the coming months.
