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Govt Announces NHIF Tax Reliefs For Kenyans; How To Apply

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Govt Announces NHIF Tax Reliefs For Kenyans; How To Apply

Govt Announces NHIF Tax Reliefs For Kenyans; How To Apply

The National Hospital Insurance Fund (NHIF) is among the Kenyan organizations that offer tax reliefs to their contributors.

The tax authorities have recently released a statement asking NHIF contributors to take advantage of the tax relief options available to them and apply for reimbursement.

The statement highlights that the Finance Act 2021, which took effect on January 1, 2023, has amended Section 31 of the Income Tax Act, allowing contributions to NHIF to be eligible for insurance relief.

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The Income Tax Act, specifically sections 30 and 31, allows for personal relief at a rate determined by the third schedule. This personal relief is available to various contributors, including those who pay for insurance coverage through organizations like NHIF.

Personal and insurance reliefs are part of the tax reliefs offered by the government in Kenya and are granted on a monthly basis.

These tax incentives help reduce the amount of tax one has to pay and support the financing of important national projects, such as education and health policies, as well as life insurance for individuals residing in the country.

Section 31 of the Income Tax Act requires that the compensations for the insurance relief must be remitted in cash to the policyholder.

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This compensation acts as a credit against a tax liability and every resident individual is entitled to a personal relief of Ksh16,896 per annum (Kshs1,408 per month), effective January 1, 2018.

For example, if the tax due for a particular month is Ksh5000, a tax relief of Ksh1408 will be applied, reducing the tax burden to Ksh3592.

In addition to personal relief, every resident individual is entitled to insurance relief of 15% of the amount of premiums paid for themselves, their spouse, or their child, subject to a maximum of Ksh60,000 per annum.

The education policy must have a maturity period of at least 10 years. The government explained this in a statement, emphasizing the benefits of taking advantage of the tax relief options available to Kenyans.

To apply for NHIF relief, taxpayers who are filing their Income Tax Resident (ITR) Returns for 2022 are advised to follow the guidelines provided by the tax authorities.

This can help ensure that they take full advantage of the tax relief options available to them and receive the reimbursement they are entitled to.

Govt Announces NHIF Tax Reliefs For Kenyans; How To Apply

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