Court Questions Legality of SHIF Deductions, Cites Double Taxation

The government’s plan to implement the Social Health Insurance Fund (SHIF) has hit a legal snag after the High Court raised concerns over the mandatory 2.75% gross income deduction, calling it potential double taxation. Justice Chacha Mwita ruled that gross income can only be taxed once, casting doubt on the levy’s legality. The court, however, stopped short of a final decision, pending an ongoing petition challenging SHIF regulations. The government is also seeking to recover over KSh 21 billion from employers who failed to remit contributions.