How Every Kenyan, Even Without SHA, Fuels Our Nation's Wallet

Let us discuss a common frustration in Kenya today: money. Specifically, the pinch we feel trying to keep up with bills, necessities, and contributions like the Social Health Authority (SHA). For millions, that monthly SHA contribution feels like a stretch too far.

Many Kenyans cannot even afford the SHA contribution. What to do? The recent announcement that the state will pay SHA contributions for 1.5 million needy Kenyans is a welcome relief for many families. Who does not need help today?

But this announcement raises a big question. If someone cannot afford their SHA contribution, does it mean they are not contributing to the nation’s coffers at all?

The answer is a resounding no. In fact, Kenyans who struggle to make direct SHA payments are some of the most consistent contributors to our national tax revenue. How? It is all in the daily hustle.

The Silent Tax Contributors

You pay taxes every day in your daily purchases. Think about your typical day. You stop for a cup of tea with milk and sugar on your way to work. You buy a loaf of bread, some cooking oil, or airtime for your phone. Maybe you even take a matatu or buy a new pair of shoes. You are bringing up a family, etc.

In each of these simple, essential transactions, you are paying taxes. But how do you pay tax?

Value Added Tax

This is the big one. Every Kenyan, unless specifically exempted, pays Value Added Tax (VAT) on products that are vatable. A standard 16% VAT is applied to a wide range of goods and services. This includes everything from the food you buy (unless exempt) to the energy bill you pay.

This tax is included in the price. You do not see it as a separate line item on your supermarket receipt, but it is there. Every single time you spend, you are contributing to the tax revenue. The more you consume, the more you pay.

Excise Duty

That airtime you buy? It has an excise duty. What airtime do you use to call your family and friends? What data bundles do you use to watch YouTube, TikTok, and even read this article? They all have excise duty.

Even the money transfer fees when you send or receive cash via M-Pesa or Airtel Money carry a small excise duty. These are consumption taxes. This means the more you consume, the more you contribute, regardless of your formal or informal income.

This system means that every Kenyan, from the CEO in a Nairobi high-rise office in Upperhill to the mama mboga in her market stall, is a taxpayer. The mama mboga might not file an annual income tax return. Still, through every sale she makes (and the VAT on her suppliers), and every purchase for her family, she is actively participating in funding public services.

The Bridge Between Your Daily Taxes And SHA

This is the crucial part. The taxes collected from these everyday purchases, including your VAT and excise duty, go into the government’s consolidated fund. This massive pool of money is what funds everything from building roads and paying teachers to subsidizing healthcare programs.

So, when the government announced its plan to cover SHA contributions for 1.5 million vulnerable Kenyans, it was not magic. The funding for this crucial safety net is coming from that very pool of revenue: a pool that everyone, including the beneficiaries, has helped to fill through their daily consumption.

It is a powerful cycle of solidarity:

a. You contribute indirectly through VAT, excise duty, or other taxes on essential goods.
b. The Kenya Revenue Authority (KRA collects these taxes).
c. The government allocates a portion of these funds to social protection programs.
d. Those programs, like the SHA waiver, come back to support you and your community’s health.

A Step Towards Universal Healthcare

This new initiative is more than just a payment. It is a recognition that healthcare is a right, not a privilege. By easing the financial burden on the most vulnerable, the state is not only protecting families from catastrophic health expenses.

It is strengthening the entire SHA system. More enrolled members mean a broader risk pool and a more sustainable model for achieving universal health coverage (UHC) in Kenya.

The goal is to ensure that no one has to choose between putting food on the table and accessing quality healthcare. It is about building a system where everyone is protected and where everyone’s contribution, whether direct or indirect, is valued.

So, the next time you buy that packet of sugar, remember that you are not just feeding your family. You are also playing a vital, though often invisible, role in building a healthier, more secure Kenya for all.

1. How to apply for a NCPWD card HERE

2. How to apply for Senior Citizen Assistance – HERE

Read More Articles – HERE

For tax consultancy and investment advisory – HERE

Tax Interview Quiz

This quiz will test your understanding of why a tax commissioner asks specific questions in any tax review. For taxpayers to improve tax compliance.

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#1. Why will the tax commissioner ask, “Are the company directors citizens with tax residency in the country?”

a) To determine if the directors qualify for a government tax incentive.

b) To confirm that the directors’ income is subject to local tax laws. *

c) To gather information for immigration status updates.

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#2. Why will the tax commissioner ask, “Are the directors also shareholders?”

a) To determine if dividend distributions are being properly taxed. *

b) To assess potential conflicts of interest in company management.

c) To ensure the directors are actively involved in company operations.

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#3. Why will the tax commissioner ask, “What are the primary sources of the company’s income?”

a) To understand the nature of the company's operations for accurate tax assessment.

b) To prepare a case for recommending industry-specific tax exemptions.

c) To decide whether the company qualifies for government grants.

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#4. Why will the tax commissioner ask, “What are the main expenses in the company?”

a) To evaluate the company’s spending efficiency.

b) To determine eligibility for cost-saving tax credits.

c) To identify any unusual expenses that could indicate tax evasion.

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#5. Why will the tax commissioner ask, “Does the company have any loans from its shareholders?”

a) To check if interest on shareholder loans is being properly recorded for tax purposes.

b) To identify possible internal cash flow issues in the company.

c) To understand shareholder contributions to company growth.

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#6. Why will the tax commissioner ask, “What are the current VAT balances?”

a) To assess if the company qualifies for a VAT refund.

b) To verify if the company is accurately remitting VAT based on taxable sales.

c) To provide the company with updated VAT compliance guidelines.

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#7. Why will the tax commissioner ask, “Has the company sold any tender documents?”

a) To assess the company’s involvement in the public procurement sector.

b) To evaluate the company’s customer base.

c) To determine if there are unreported income streams.

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#8. Why will the tax commissioner ask, “Does the company deduct VAT incurred when servicing non-commercial vehicles?

a) To analyze the company’s fleet expenses.

b) To ensure VAT deductions are compliant with tax laws.

c) To assess if the company qualifies for VAT relief on vehicle servicing.

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#9. Why will the tax commissioner ask, “Does the company provide staff welfare?”

a) To evaluate if employee benefits are taxable as per regulations.

b) To assess the company’s support for its employees.

c) To check if welfare programs are compliant with labour laws.

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#10. Why will the tax commissioner ask, “Who are the company directors?”

a) To conduct background checks on the directors.

b) To assess the directors' expertise for policy recommendations.

c) To confirm the individuals responsible for the company’s tax obligations

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#11. Why will the tax commissioner ask, “Does the company subject all allowances to PAYE?”

a) To verify if allowances are being properly taxed as income.

b) To ensure employee benefits are in line with market standards.

c) To determine if the company qualifies for PAYE exemptions.

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#12. Why will the tax commissioner ask, “Does the company maintain the director’s current account?”

a) To confirm if director withdrawals are appropriately documented for tax.

b) To track the director’s involvement in company financials.

c) To ensure the company’s compliance with corporate governance.

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#13. Why will the tax commissioner ask, “Has the company paid any legal fees?”

a) To determine the company’s compliance with legal standards.

b) To understand the company's level of legal risk.

c) To check if legal fees are correctly categorized as business expenses for tax purposes.

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#14. Why will the tax commissioner ask, “What other business does the company transact?”

a) To identify if there are undeclared income sources.

b) To explore opportunities for expanding business operations.

c) To assess the company’s potential for partnerships.

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#15. Why will the tax commissioner ask, “How often is the bank reconciliation done?”

a) To evaluate the company’s financial management practices.

b) To confirm that bank transactions are regularly monitored for tax accuracy.

c) To ensure funds are secure and properly accounted for.

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#16. Why will the tax commissioner ask, “What are the receivables in the current accounts?”

a) To ensure receivables are reported as taxable income where applicable.

b) To help the company recover overdue payments.

c) To assess the company’s credit policy.

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#17. Why will the tax commissioner ask, “Does the company maintain stock records?”

a) To assist the company in managing inventory more effectively.

b) To confirm that stock values are accurately reported for tax purposes.

c) To determine eligibility for stock management tax incentives.

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#18. Why will the tax commissioner ask, “Has the company applied for investment deductions?”

a) To ensure the company is claiming only eligible deductions.

b) To encourage the company to apply for more deductions.

c) To advise the company on future investment opportunities.

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#19. Why will the tax commissioner ask, “Has the company remitted all the excise duty?”

a) To determine if the company qualifies for excise duty exemptions.

b) To verify compliance with excise duty regulations.

c) To understand the company’s excise duty liabilities.

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#19. Why will the tax commissioner ask, “Has the company remitted all the excise duty?”

a) To determine if the company qualifies for excise duty exemptions.

b) To verify compliance with excise duty regulations.

c) To understand the company’s excise duty liabilities.

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#20. Why will the tax commissioner ask, “Where is the company’s Personal Identification Number (PIN) base?”

a) To confirm the tax jurisdiction under which the company operates.

b) To locate the company’s headquarters.

c) To update the company’s address on official records.

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