Gov’t wants Housing levy to take effect next month

KRA office located at Times Towers in Nairobi
File photo of KRA headquarters located at Times Towers in Nairobi. PHOTO| COURTESY

Net salary of employees in the public & private sector is expected to dip 1.5percent in May as the Government directive to deduct housing levy takes effect.

A notice in the local dailies indicates that employers are to deduct and remit the levy by the 9th of every succeeding month.

Also Read: The Ayes have it! MPs authorise Uhuru to tax Kenyans more

“The Housing Fund shall be used to finance the Affordable Housing Scheme under the Big 4 Agenda,” the notice reads.

President Uhuru Kenyatta unveiled the Big 4 Agenda two years ago saying his government would put up half a million low-cost houses.

With the grand plan, the tax load became heavier as Treasury introduced a new fuel levy and proposed the Housing Fund levy.

COTU Secretary General Francis Atwoli moved to court arguing that there was no public participation in the plan.

“The petitioner is opposed to the proposed amendments due to the fact that they don’t promote good governance, accountability and transparency, “ he argued.

On March 18, 2019, the Employment and Labour Relations court extended orders suspending the government plan to impose the 1.5percent Housing levy. The suspension was later lifted.

Also Read: New fuel tax pushes Kenya inflation to highest in 11 months

On September 20, 2018, members of Parliament passed a Bill with controversial tax measures to raise more revenue.

The Bill would ensure that mobile phone subscribers pay more for airtime and data services, mobile money transfer services and that salaried workers contribute 1.5 per cent of their earnings to the National Housing Development Fund.

Other tax measures in Bill included rising cost of internet; double the tax on cost of bank charges like ATM, account fees and over-the-counter withdrawals; introduction of special ‘anti-adulteration’ tax on Kerosene importers and new excise duty on confectioneries such as sweets, juices and chocolates.

Also Read: New fuel tax pushes Kenya inflation to highest in 11 months


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