The statutory deductions burden on Kenyan workers is set to grow even heavier if and when, as is widely expected, the Social Health Insurance Bill, 2023 is passed into law.
The Bill, which seeks to mobilise more funds for the rollout of President William Ruto’s universal health coverage (UHC) plan, has proposed a mandatory 2.75 percent deduction on workers’ monthly salaries to a board set up to replace the National Hospital Insurance Fund (NHIF).
Now, UHC is a wonderful idea whose implementation is perhaps long overdue.
The UN sustainable development goals (SDGs) set a target for countries to achieve UHC by 2030. But the high deduction rate proposed in the new Bill will aggravate most workers’ financial vulnerability amidst the high cost of living, with their take-home having shrank considerably after recent additional taxes and levies.
In the past six months, they have seen deductions on their payslips increase, beginning with rise in the National Social Security Fund (NSSF) contributions in February and the enforcement of the 1.5 percent housing tax in July.
The NSSF, housing tax and the planned social health insurance deductions will together raise the share of what the government takes from workers’ payslips above 20 percent for those earning Sh50,000 a month.
Many workers are known to be struggling with repaying bank loans while a shrinking disposable income will make it much harder for households to pay schools for their children and bills such as rent and electricity.
We hope that MPs will take into account the current struggles of workers and households when the Bill is tabled for debate in Parliament.
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Note: The results are not exact but very close to the actual.
