President Ruto Proposes Tax Relief for Health and Housing Contributions in Finance Bill 2024

The government has proposed tax relief for contributions made towards the Social Health Insurance Fund (SHIF), the post-retirement medical fund, and the affordable housing levy, which is set to go a long way in easing the tax burden on Kenyans at a time when the government has reviewed a number of taxes.

The announcement came as part of the Finance Bill 2024, proposed by President William Ruto’s government.

Under the provisions of the bill, contributions to these funds will be considered deductible expenses in the computation of taxable income for contributors. This means individuals and businesses can subtract these contributions from their adjusted gross income (AGI), thereby reducing the amount of income tax owed.

The Finance Bill seeks to repeal existing reliefs on contributions made to the National Health Insurance Fund and affordable housing scheme, streamlining the tax treatment of health and housing-related contributions.

Previously, individuals paying premiums towards medical insurance or the National Health Insurance Fund could avail a relief of up to 15 per cent of the amount paid, capped at Ksh60,000.

Similarly, individuals saving for affordable housing could claim relief of 15 per cent of their contributions, up to Ksh108,000 annually. However, these reliefs are now proposed to be removed.

The proposed changes aim to simplify the tax system and ensure fairness in the treatment of contributions across different schemes.

NHIF building in Nairobi.



If passed into law, contributions to SHIF, post-retirement medical funds, and the affordable housing levy will be fully deductible for tax purposes, providing taxpayers with more comprehensive benefits for their contributions.

Furthermore, the Finance Bill outlines specific provisions for allowable expenses, including contributions to SHIF by every Kenyan household and non-Kenyan residents residing in Kenya for over twelve months.

Additionally, it includes employer deductions under the Affordable Housing Act and contributions to post-retirement medical funds, subject to specified limits.

Already the Kenya Revenue Authority (KRA) has initiated the deduction of the affordable housing levy from March payslips, following a directive.

The levy, set at 1.5 percent of monthly gross earnings, aims to fund the government’s housing programme.

Despite initial announcements, the implementation date for SHIF contributions is set to start on July 1. Under SHIF Kenyans will now begin paying 2.75 per cent of their gross salaries towards health insurance, reflecting a change from the Ministry of Health’s initial schedule.

The National Treasury offices at Harambee Avenue, Nairobi


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