SHIF's 2.75 per cent deduction remains in effect, Duale says, despite Judge Mwita labelling it illegal
Health Cabinet Secretary Aden Duale clarified that the Ministry respects the court process but emphasised that it did not invalidate the deductions.
The Ministry of Health has maintained that the 2.75 per cent statutory deduction for the Social Health Insurance Fund (SHIF) remains in effect.
This is despite High Court Judge Chacha Mwita on Monday saying that the 2.75 per cent deduction from SHIF is double taxation and, therefore, illegal.
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In a statement issued Monday, Health Cabinet Secretary Aden Duale clarified that the Ministry respects the court process but emphasised that it did not invalidate the deductions.
“The Ministry of Health acknowledges the High Court's decision in Petition E524 of 2024 Clarence Eboso v. Ministry of Health & Social Health Authority (SHA) delivered by Justice Mwita on June 13, 2025,” the statement read.
The ministry noted that the petition challenged the transition of data from the National Health Insurance Fund (NHIF) to SHA, as well as the statutory 2.75 per cent contribution to SHIF.
"The Court, recognising that the core issues raised are already under active consideration by the Court of Appeal, declined to issue any orders and struck out the petition," Duale said.
The Ministry of health empasized that the deduction is still legally enforceable and is now recognized as tax-deductible under the Tax Laws (Amendment) Act, 2024 noting that the Social Health Authority continues to operate within the framework of the Universal Health Coverage (UHC) legislation, which includes the Social Health Insurance Act, the Digital Health Act, and the Primary Health Care Act. These laws aim to improve access to affordable, equitable, and quality healthcare for all.
“We recognise the vital role of our courts in guiding public policy and administration as we continue building a more inclusive, accountable, and future-ready national health insurance framework. We invite all Kenyans to walk with us on this journey toward a healthier, more secure future,” Duale said.
According to the High Court judge, the law permits only income tax to be deducted from gross income. Imposing an additional statutory deduction on the same gross income—such as the SHIF contribution—violates this principle.
“There can be no other gross income from which a person can again contribute 2.75 per cent to the Fund under the Social Health Insurance Act (SHA) and its regulations,” Justice Mwita said. “Any subsequent deduction based on that same gross income, after income tax has been levied, clearly constitutes double taxation.”
He explained that by requiring contributions from gross income already subject to income tax, the regulation introduces an unlawful financial burden. “This creates a negative element of taxation that violates the law,” he said.
However, the court declined to issue binding orders, noting that a similar matter is already under review by the Court of Appeal. Justice Mwita observed that the issues raised mirrored those in Petition E513 of 2024, which challenges the legality of SHIF regulations and the constitutionality of key health laws, including the Social Health Insurance Act, 2023, the Digital Health Care Act, 2023, and the Primary Health Care Act, 2023.
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