The High Court has singled out a problem and a grave government blunder regarding the Social Health Insurance Fund (SHIF) contribution by the salaried workers.
In his judgment, Justice Chacha Mwita said that the 2.75 per cent deduction from gross income is double taxation and, therefore, illegal.
According to the Judge, the law clearly states that only income tax is withheld from gross income; therefore, no other deductions can be made from an employee's total earnings.
He asserted that any further deductions, after the payment of income tax, introduce an unlawful and harmful component that constitutes double taxation. "There can be no other gross income from which the person can again contribute 2.75 per cent to the Fund under SHIA and the regulations made thereunder.
