The High Court has refused to hear a case challenging the mandatory 2.75 per cent Social Health Insurance Fund (SHIF) deductions because the same issues are already being dealt with in other ongoing court cases.
In his decision on Monday, Justice Chacha Mwita struck out a petition filed by four doctors who contested the legality and fairness of the SHIF contribution system.
The petitioners raised multiple constitutional concerns in the SHIF deductions, including alleged violations of privacy, equality, and property rights. They challenged the mandatory registration of every Kenyan into SHIF and the 2.75 per cent of the gross income.
The petitioners, all voluntary National Health Insurance Fund (NHIF) members, raised multiple constitutional concerns, including alleged violations of privacy, equality, and property rights. They also challenged the mandatory registration of every Kenyan into SHIF, the compulsory deduction of 2.75 per cent of gross income for employed individuals, and a similar rate based on household income for the unemployed.
A central argument in the petition was that post-tax income is protected property and cannot be subjected to new deductions without direct benefit or legal justification.
However, the court declined to engage with the substantive issues, determining that the case was sub judice, meaning it was already before a judge.
"I, therefore, find and hold that to the extent that some of the issues raised in this petition are pending in the civil appeal and in petition E513 of 2024, it would be appropriate to defer to the courts dealing with those matters,” Justice Chacha said in his ruling.
The judge cited two ongoing proceedings, including one filed by Busia Senator Okiyah Omtatah, which addressed the same legal questions, including the constitutionality of the Social Health Insurance Act (SHIA).
Justice Mwita acknowledged that some of the matters may not be fully decided in the two other cases but reiterated that allowing the petition to proceed while the two other cases were pending, it would risk conflicting rulings.
"For that reason, if the Court of Appeal were to agree with the High Court that the three statutes are constitutionally infirm, this court would have acted in vain whatever its decision,” the ruling went on.
The SHIF pay structure involved a mandatory deduction of 2.75 per cent of one’s gross income or household income. The minimum payment currently stands at Ksh300 per month.
For salaried employees, the deduction is automatically taken from the monthly gross salary by the employer, who then remits it to the Social Health Authority. This is to be done by the ninth day of the following month.
As per Kenyan law, double taxation involves a situation where one’s income is taxed twice by the same tax authority or by two different jurisdictions. The Income Tax Act outlaws the same income from being taxed twice on the principles of fairness and equity, and taxation.
