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President William Ruto’s camp has ceded ground in the controversial 3% housing levy.
In a short statement, President Ruto’s United Democratic Alliance said that MPs have proposed to reduce the levy to 1.5%.
The National Assembly Finance and Planning Committee is recommending a slash of the levy after collecting views from Kenya's who submitted their opinion regards the Finance Bill 2023 which contains the proposed housing levy.
Initially, the Treasury proposed a 3% deduction from every employee's salary, to be remitted to the National Housing Fund, with employers matching the amount.
Other than reducing the levy, the committee has also proposed to scrap the requirement for employers to match an employee’s contribution.
The MPs are also recommending postponing the implementation of the levy from June 2023 to January 2024.
The deferment will allow sufficient time to enact appropriate laws and establish a robust framework for the Housing Fund.
Housing PS open to changes in housing levy
Principal Secretary for Housing and Urban Development Charles Hinga told the National Assembly Finance Committee on Tuesday, June 6, to utilize its powers and incorporate necessary modifications into the bill.
The PS maintained that the levy will benefit contributors, as the funds will not be subjected to taxation upon maturity contrary to reports.
The PS implores the committee not to discard the entire Housing Levy proposal and instead, address the challenges and concerns raised by Kenyans.
Budget reading
This Bill comes in the wake of diminishing revenues owing to the country’s debt burden, a huge wage bill among other competing national priorities.
Treasury Cabinet Secretary Prof Njuguna Ndung’u is set to present the Budget Statement for the 2023/2024 Financial Year on June 15.
After undertaking public participation in the Bill as required by law, the Departmental Committee on Finance and National Planning is now expected to engage the National Treasury and the Kenya Revenue Authority on some of the fundamental issues raised.