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Kenya Revenue Authority has confirmed the backdating of the Affordable Housing Levy, warning employers of consequences of failing to comply with the Finance Act 2023

KRA seals fate of Kenyans' August salaries | Pulselive Kenya

Denis Mwangi

Kenya Revenue Authority has confirmed the backdating of the Affordable Housing Levy that had been <a data-link-role-code="open_new_tab" href="https://www.pulselive.co.ke/news/local/high-court-stops-implementation-of-finance-bill-2023/wshs7zs">suspended together with the Finance Act 2023</a> by the High Court in early July.

Following a lifting of the suspension by the Court of Appeal, KRA said that employers are required to submit the monies due for July 2023.

This means employees are likely to experience a double deduction in their August salaries as employers remit the housing levy for both July and August.

KRA acting Commissioner General Rispah Simiyu during an interview on July 11, 2023

KRA also announced that the Cabinet Secretary, Ministry of Lands, Public Works, Housing, and Urban Development Zacharia Macharia appointed KRA as the official collecting agent for the Affordable Housing Levy (AHL) through a Public Notice dated August 2, 2023.

"With effect from 1st July, 2023, all Employers are required to deduct the AHL from the employee's gross salary and remit together with the employer's contribution as follows.

"1.5% of the employee's gross monthly salary by the employee and 1.5% of the employee's monthly gross salary by the employer," the notice by KRA read in part.

KRA emphasized that employers must declare the AHL under sheet "M" of the PAYE return on the iTax platform.

READ: <a data-link-role-code="open_new_tab" href="https://www.pulselive.co.ke/business/international/top-5-african-countries-with-the-least-affordable-housing/yz4fgln">Top 5 African countries with the least affordable housing</a>

Subsequently, employers should generate a payment slip under the tax head "agency revenue" and tax sub-head "Housing Levy" and make payments through KRA agent banks or mobile money.

KRA Acting Commissioner General Rispah Simiyu

KRA warned that any employer who fails to comply with the AHL regulations will face penalties.

In case of non-payment, the employer will incur a penalty equivalent to two percent of the unpaid funds for each month the payment remains outstanding.

READ: <a data-link-role-code="open_new_tab" href="https://www.pulselive.co.ke/news/local/kenya-conference-of-catholic-bishops-pressures-president-ruto-repeal-finance-act-2023/0m7r50h">Catholic bishops pressure Ruto to repeal Finance Act 2023</a>

President William at the KRA headquarters at Times Towers where he filed his annual returns

KRA seals fate of Kenyans' August salaries

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