Kenyans to dig deeper into pockets as housing levy takes effect

Are you employed? If yes; expect a 1.5 percent levy deduction towards the affordable housing project soon.

Housing Cabinet Secretary James Macharia is optimistic of a go ahead following the withdrawal of cases that barred the government from effecting the deductions this month.

The housing levy kitty is expected to act as insurance for investors who put up units under the affordable housing plan with employees who do not benefit expected to be refunded their contributions after 15 years.

Employers are expected to submit the deductions to the National Housing Development Fund (NHDF) every month once the regulations are published.

This will see Treasury raise Ksh 57 billion annually from workers to finance the proposed NHDF.

The government has also rolled out a portal bomayangu.go.ke for potential home owners to register.

Currently, Kenya requires more than 250,000 housing units every year to meet demand.

The court had temporarily suspended the implementation of the deduction on workers’ salaries pending the hearing and determination of a case filed by Central Organisation of Trade Unions Kenya (Cotu).

Justice Hellen Wasilwa of the Employment and Labour Relations Court issued the interim orders on suspending Section 31A of the Employment Act as amended by Section 86 of the Finance Act 2018.

COTU contested the implementation of the levy saying it’s unconstitutional and amounted to double taxation.

Through lawyer Okweh Achiando, COTU Secretary General Francis Atwoli told the court that the levy on the basic salary of employees has far-reaching implications on the right to fair remuneration.

The affordable housing project which seeks to build 500,000 houses by 2022 is one of President Uhuru Kenyatta’s Big Four Agenda alongside manufacturing, universal health coverage and food security.