Kenya Revenue Authority has confirmed the backdating of the Affordable Housing Levy that had been suspended together with the Finance Act 2023 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 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.
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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.
Consequences
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.
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