Government offering tax relief to NHIF contributors; How to apply
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NHIF (National Hospital Insurance Fund) contributors to benefit from financial compensation/ tax relief by the government
NHIF (National Hospital Insurance Fund) contributors to benefit from financial compensation/ tax relief by the government.
In a statement released on Friday, February 10, tax authorities asked Kenyans contributing to NHIF to review their relief options and apply for reimbursement.
“The Finance Act 2021 amended Section 31 of the Income Tax Act to allow contributions to NHIF to qualify for Insurance Relief effective January 1, 2023,” read the statement.
Income Tax Act (cap 470), Sections 30 and 31 allow for personal relief at the rate determined under the third schedule, to benefit various contributors such as those paying for insurance coverage, including the NHIF.
“Personal and insurance reliefs form part of tax reliefs in Kenya. These incentives reduce the amount of tax one has to pay and are granted on a monthly basis,” the tax authority stated in a statement.
The government uses relief insurance relief on premiums to take care of important national projects such as education policies, health policies, or life insurance for resident individuals.
Section 31 of the Income Tax Act stipulates that the compensations must be remitted in cash to the policyholder.
“It acts as a credit against a tax liability. Every resident is entitled to a personal relief of Ksh16,896 per annum (Kshs1,408 per month) effective January 1, 2018.
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“Every resident individual is entitled to an insurance relief of 15 percent of the amount of premiums paid for self, spouse or 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 in a statement.
How to apply for NHIF tax relief
Taxpayers filing the Income Tax Resident (ITR) Returns for 2022 are guided as follows:
1. Upon filing returns, the user should select ‘Yes’ to the question, “Do you have an Income Insurance Policy?”
2. Proceed to capture NHIF details under the iTax “Insurance Relief” sheet.
3. Slot in NHIF PIN and card number and define the type of policy as health.
You can also send the word NHIF as SMS to 1550 to retrieve your PIN and card number.
Users should indicate that their designation is a self-policy before defining the return periods, which should run from the beginning to the end of the year.
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