Reprieve to Kenyan employees after the Kenya Revenue Authority announced a 15 per cent insurance relief of National Hospital Insurance Fund (NHIF) premium payments.
According to the taxman, the relief took effect last month and should be captured in the latest employee pay slips.
“Contributions to NHIF will therefore, be eligible in the computation of insurance relief. The effective date of this amendment was January 1, 2020,” read the taxman notice.
KRA noted that section 31 (1) of the Income Tax Act within the Finance Act bill had been amended to extend Insurance relief to include those who made contributions to the scheme.
The amount being claimed is equivalent to 15 per cent of the premiums paid with a cap of Sh5,000 per month.
The change was meant to expand the relief to policyholders, which initially only covered education, life and health insurance premiums.
The new plan sought to entice Kenyans to enrol in the Fund by introducing the insurance relief clause.
This is a big boost for President Uhuru Kenyatta’s Universal Health Coverage (UHC) goal which falls under his ‘Big Four Agenda’ which targets to provide all 47 million citizens with affordable healthcare by 2022.
Official data shows more than 25.36 million Kenyans are above 18 years and the NHIF has 8.898 million members.
The compulsory enrolment has the potential to make the NHIF the richest State-backed firm given that the proposed law will also require employers to match workers’ monthly contributions to the fund.
The planned mandatory NHIF membership will be an upgrade of the scheme where only workers in the formal sector are compelled to join.
The government-backed NHIF (Amendment) Bill seeks to make it compulsory for every Kenyan above 18 years to contribute and be a member of the NHIF.
They will be required to pay Sh500 monthly in a remodelled universal health coverage (UHC) scheme for outpatient and inpatient services, including maternity, dialysis, cancer treatment and surgery.
“We are looking at tying the active membership of NHIF to other services just like KRA PIN is for those going for things such as opening a business or seeking government tenders. This is one of the areas we are looking at once the law passes to encourage enforcement of the same,” NHIF chief executive officer Peter Kamunyo said.