The Finance Act, 2021 expanded the insurance relief provision to include NHIF contributions made by individuals. This has been in effect since 1st January, 2022.
- Previously, NHIF has been treated as a deduction by accountants while preparing the monthly payroll.
- While this is still a statutory deduction, it is now treated as a tax relief. This means, it reduces the PAYE that is payable to KRA.
- In the long run, the taxpayer’s take home is expected to increase, dependent on the scale of your NHIF contributions.
- In Kenya, insurance relief is granted at the rate of 15% of the qualifying premiums paid but capped to a maximum of Kshs. 5,000 per month or Kshs. 60,000 per year.
- This provision is a welcome move to many individuals who make contributions to the National Health Insurance Fund. They will now enjoy a tax relief equal to 15% of their NHIF contributions.
JoFebruary 7, 2022
Does the relief apply across board to include voluntary contributions for the self employed?