Are you ready for SHIF?


Greetings from RWK & Associates! 
We are pleased to update you on significant developments in Kenya's healthcare landscape.
The government has enacted the Social Health Insurance Act, No. 16 of 2023 (SHIFA), aimed at enhancing access to healthcare through the Social Health Insurance Fund (SHIF). SHIFA was assented to on October 19, 2023, and came into force on November 22, 2023, marking a pivotal step towards achieving universal health coverage in Kenya.

SHIF and Its Impact
The Social Health Insurance Fund (SHIF) established under SHIFA is a transformative initiative designed to provide comprehensive health insurance coverage for all Kenyans. SHIF aims to replace the National Health Insurance Fund (NHIF), streamlining healthcare funding and ensuring more equitable access to medical services. 

With SHIFA, the Social Health Authority will oversee the functions previously managed by NHIF, extending its reach to cover primary healthcare services through the Primary Health Fund (PHF) and addressing emergency, chronic, and critical illnesses via the Emergency, Chronic, and Critical Illness Fund (ECCIF). This structured approach ensures that healthcare is accessible and affordable for every Kenyan household.

Key Dates and Contribution Rates
SHIFA mandates the registration of all Kenyan residents and non-residents living in Kenya for over twelve months. Contributions to SHIF are structured to be fair and sustainable. For salaried employees, a statutory monthly deduction of 2.75% from wages or salary is proposed, with a minimum contribution of KES 300. 

Households without salaried income will contribute annually based on a means-tested household income, ensuring contributions are proportional to their financial capacity. Additionally, financial assistance for those in need will be provided by the government, determined through a comprehensive means testing instrument.

Transition from NHIF and ECCIF Benefits
As SHIFA becomes fully operational, SHIF will take over all functions of NHIF. All benefits schemes and packages offered by NHIF will transition to SHIF until existing contracts expire. This transition ensures continuity of coverage for all beneficiaries. 

The establishment of the ECCIF further enhances the healthcare safety net by covering costs associated with chronic illnesses and emergencies once SHIF benefits are exhausted. Funded through various sources including government appropriations, grants, and donations, ECCIF ensures that no beneficiary is left without critical medical coverage.


The enactment of SHIFA and the subsequent establishment of SHIF, PHF, and ECCIF represent a monumental leap towards achieving comprehensive medical coverage in Kenya. These initiatives promise to address gaps left by NHIF, providing a robust framework for sustainable and equitable healthcare access. As the draft regulations undergo public scrutiny and await final approval, we anticipate significant improvements in the healthcare system that will benefit all residents of Kenya. 

We at RWK & Associates will continue to monitor these developments and keep you informed on the progress and implications of these regulatory changes.

Comments

Post a Comment

Popular posts from this blog

Clarification On Taxation Of Meals Provided By Employers

Image
Background:  The Kenya Revenue Authority (KRA) issued a Technical Circular (Ref: 1005/1) in March 2017, outlining guidelines for the taxation of employment income, particularly regarding benefits provided to employees. Among these benefits, the circular stated that meals provided to employees up to a value of Kshs. 48,000 per year per employee were not subject to tax, in accordance with Section 5(4)(f) of the Income Tax Act. Clarification:  Recently, there has been confusion regarding the interpretation and application of this provision. The KRA has clarified that if an employer provides meals exceeding the value of Kshs. 48,000 per annum per employee, the entire value of the meal becomes taxable income for the employee. Essentially, any amount spent on meals beyond the specified limit is now subject to taxation under the Income Tax Act. Implications for Employers: This clarification places the responsibility on employers to ensure compliance with tax regulations regarding employee ben
Read more

Understanding Advance Tax: Essential Information for Vehicle Owners.

Image
  Welcome to the latest edition of the RWK & ASSOCIATES CPA(K) Newsletter. In this issue, we focus on Advance Tax , a critical requirement for all commercial and public service vehicle owners. Understanding how this tax operates and how to manage it effectively can save you time and avoid unnecessary complications. Advance Tax is a mandatory prepayment needed before a commercial or public service vehicle can be registered or licensed. The tax amount is determined by the vehicle's type and capacity. For example, vans, pick-ups, trucks, and similar vehicles incur a fee of Kshs. 2,500 per ton of load capacity or kshs 5000 whichever is higher. In contrast, saloons, station wagons, mini-buses, buses, and coaches are charged Kshs. 100 per passenger capacity per month or kshs 5000 annual amount whichever is higher. It is important to note that Advance Tax is not a final tax. Taxpayers must report this payment in their annual income tax returns and settle any additional taxes that
Read more

Summary Of The Key Proposed Changes In The Finance Bill 2024

Image
  Income Tax Act: • Introduction of Motor Vehicle Tax at 2.5% of the vehicle value payable upon insurance issuance. • Withholding tax on goods supplied to public entities at 3% for residents, 5% for non-residents. • Taxation of income from digital marketplaces/platforms at 20% for non-residents, 5% for residents. • Introduction of Significant Economic Presence Tax at 30% for non-residents. • Minimum top-up tax for resident entities in multinational groups. • Deductibility of SHIF, post-retirement medical funds, and the affordable housing contributions. • Investment deduction for spectrum license purchase at 10%. • An eco levy for manufacturers and importers will be introduced. • Imported motorcycles beyond a certain price will be taxed at 10% of value instead of a flat rate. • Taxation of interest income from infrastructure bonds for residents. Value-Added Tax Act: • VAT exemptions on bread will be removed. • Removal of VAT exemptions for financial services such as credit and debit car
Read more