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KRA clarifies tax implications for Social Health Insurance Fund

Huldah Matara by Huldah Matara
November 8, 2024
in News
Reading Time: 1 min read

The Kenya Revenue Authority (KRA) has issued a public notice clarifying that contributions made to the Social Health Insurance Fund (SHIF) are not currently eligible for tax relief, a significant update for taxpayers adapting to the new healthcare system. The KRA statement underscores that relief provided under the Income Tax Act “does not apply to contributions made to the SHIF under the Social Health Insurance Act.”

This development follows the recent repeal of the National Health Insurance Fund (NHIF) under the Social Health Insurance Act, which restructured Kenya’s health insurance landscape. The KRA outlined that “the Income Tax Act provides for insurance relief for a health policy whose term commences on or after the 1st January, 2007 or a contribution made to the National Health Insurance Fund (NHIF),” but this relief does not extend to the newly established SHIF.

To address this gap, the Tax Laws (Amendment) Bill, 2024, proposes an amendment to the current legislation. If passed, it would allow SHIF contributions to be deducted from taxable income, bringing SHIF’s tax treatment in line with what NHIF contributors previously experienced. This pending amendment reflects the government’s intention to align the tax structure with the healthcare reforms, though the KRA has yet to specify a timeline for any potential tax relief.

In the meantime, the KRA encourages those seeking more information on the tax implications of SHIF contributions to contact its customer support: “For further information, please reach out to our Contact Centre on Tel: 020 4 999 999, 0711 099 999 or Email: callcentre@kra.go.ke.”

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Huldah Matara

Huldah Matara

Versatile multimedia journalist with a keen interest in compelling stories that resonate with my audience. Reach out on huldahmatara12@gmail.com

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