Other than the direct deductions on employee pay that reduces their disposable income, the government has introduced a host of taxes on essential products that have further pushed up the cost of living.
These include the doubling of the Value Added Tax (VAT) on petroleum products, which was increased by the Finance Act 2023, which forced many Kenyans to rethink their mode of commuting to work while increasing operating costs for companies and pushing up the cost of essentials.
The higher taxes have however not eased the situation for the government that is unable to meet revenue targets.
During his exit interview, former Treasury Cabinet Secretary Njuguna Ndung'u drew a picture of the dilemma that is currently facing the government in meeting debt obligations in the face of contracting revenues.
According to Prof Ndungu, the Covid-19 pandemic and its aftershocks have eroded the spending capacity of many households and businesses and thus introducing new taxes will not help.
"The cost of living and high taxation debates are just symptoms of two facts in the country," he said.
"Poverty and inequality after many layers of negative shocks have persisted. What we are hearing is not the cost of living or high taxation but it is actually poverty that has hit the country so hard."
"We need to run away from this notion that high taxes will raise high revenue. In fact the opposite applies," he explained. "High taxes cannot bring you high revenue so we need to study how we optimise each tax instrument."
The higher taxes and other deductions that have been chipping away at how much Kenyans take home are in addition to other deductions such as the servicing of loans taken from commercial banks and Saccos.
Tough economic times have forced Kenyans to increasingly borrow, with much of the funds borrowed going to sustenance including paying for rent, fees and even food, meaning thinner payslips as they service the loans.
A February report by Old Mutual showed that 38 per cent of people who took part in a survey were borrowing for everyday expenses. Another 33 per cent were borrowing for an unexpected emergency.
It also showed that 11 per cent of the respondents in the survey were borrowing to repay a loan, while another six per cent were borrowing to lend money.
"Almost half (48 per cent) of working Kenyans are financially stressed. An overwhelming nine in 10 Kenyan consumers are earning less than or the same as they did prior to Covid.
"This means that the majority of these consumers currently have less money in their pockets than they did prior to being impacted by the pandemic," said the Old Mutual Financial Monitor.
Despite the impact that the new contributions will have on kenyans ability to spend as well as seemingly insurmountable challenges that the new system has faced in its first week of implementation, the government says it will push ahead with full implementation.
The government says SHIF is meant to create fairness and equity in healthcare access regardless of income levels but also offers expanded benefits compared to NHIF.
"We looked at this in terms of equity; are all Kenyans contributing. We looked at the average contribution of all Kenyans and if all Kenyans contribute 2.75 per cent of their income, then there will be equity and we will be able to support each other in delivering the social health insurance system of the country," said Health Services Principal Secretary Harry Kimtai in a media interview last week.
Kimtai said SHIF provides all Kenyans the same cover for 2.75 per cent of their income with benefits that some did not enjoy under NHIF.
"Under NHIF there are those who were getting enhanced schemes for those who are paying more," explained Kimtai.
"This time every Kenyan who has paid 2.75 per cent will be entitled to an equal benefit package without differentiation."