The High Court raised concerns over the legality of the mandatory monthly deductions on salaried Kenyans to the Social Health Insurance Fund (SHIF), terming it potentially unconstitutional.
Justice Chacha Mwita on Monday observed that the 2.75 percent contribution to the Fund is problematic, terming it as double taxation.
He argued that every citizen is already obligated to pay income tax under the Income Tax Act — a tax levied directly on one’s gross income, whether earned from employment or investment.
Mwita emphasized that it is unlawful to impose an additional deduction on the same gross income, even after income tax has been paid and any other statutory deductions based on the already-taxed gross income would amount to double taxation.
In the judge’s view, the SHIF regulations introduce a “negative element of taxation” — making the contribution unlawful and a burden contrary to principles of fair taxation.
The court was issuing its decision in a case filed by three doctors.
However, the court struck out the petition, ruling that it would be premature to determine the case while a similar matter is still pending before another court.
It ruled that issues raised in the petition closely mirrored those in Petition E513 of 2024, which questions the legality of SHIF regulations, as well as the constitutionality of several health laws, including the Social Health Insurance Act, 2023, the Digital Health Care Act, 2023, and the Primary Health Care Act, 2023.
