Bill to deduct 2.75% gross pay from October gets greenlight

Bill to deduct 2.75% gross pay from October gets greenlight

Teachers, civil servants and other salaried Kenyans will be subjected to a deduction of 2.75 percent of their gross pay towards a new health insurance fund.

Push by the government to fast track the Social Health Insurance Bill got a major boost with Members of Parliament from across political divides supporting the amendments.

The Bill, which seeks to establish a Social Security Insurance Authority to replace the current National Insurance Fund (NHIF), passed the Second Reading and is expected to be tabled before the committee of the whole House today Wednesday.

To fund the grand health scheme, the State plans to increase deductions from the current range of Sh150 to Sh1,700 to a flat rate calculated at 2.75 percent of gross monthly earnings.

Once enacted, the Bill will see taxpayers deducted a mandatory 2.75% of their salaries to fund it; this has been met with uproar from civil society organisations who have cautioned the government against overburdening Kenyans.

National Assembly Majority Leader Kimani Ichung’wah defended the Bill as a necessary undertaking that will revolutionise the delivery of healthcare in the country and root out cartels that have looted funds meant for ailing Kenyans.

“SHIF seeks to accelerate the progress we have made and fast track the achievement of UHC. NHIF was plagued by inefficiencies and governance challenges. It has also turned to be financially unsustainable; it is these reasons that have prompted the birth of the Social Health Insurance Bill,” said Ichung’wah.

Minority Whip Junet Mohamed chimed in: “The elephant in the room is corruption, if that is sorted out you will see every Kenyan receiving quality healthcare. We are now saying we want to transform NHIF to a social insurance, its good, but unless we deal with corruption we will have the same problem.”

“Until we bite the bullet and deal with cartels in the health sector nothing will change. Let us not condemn NHIF, they have done some good work.”

Members of Parliament however expressed concerns over the fate of thousands of NHIF employees after the establishment of the proposed authority.

The proposed mandatory monthly deduction of 2.75% on taxpayers payslips has elicited sharp criticism from civil society organisation, who have faulted the government of being blind to the plight of Kenyans by continuing to levy more taxes.

The Okoa Uchumi group has also accused the government of turning public participation forums into a mere charade and disregarding Kenyans’ input in those forums.

Activist Zainab Kombo said: “The proposal to deduct 2.75% from employees’ pay slips for the health scheme is excessive and will strain the tax payer.”

Annete Nerima added: “Currently, our tax system lacks predictability which poses difficulties for individuals and businesses as it heavily relies on financial legislation done annually.”

The Social Health Insurance Bill is among four Bills proposed by the Executive for fast tracking by Parliament to operationalise the health plan.

The other Bills are the Digital Health Bill, the Primary Healthcare Bill, and the Facility Improvement Bill.

If assented, the Bill establishes three funds: the Primary Health Care Fund to cater for primary care, a Social Health Insurance Fund, and a Chronic Illness and Emergency Fund that provides for chronic illnesses like complications of diabetes, hypertension and Cancer management and emergency treatment.

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