Ruto’s housing levy to be imposed on workers’ gross salary
National Assembly clear 1.5pc housing levy on gross salary as MPs pass the controversial Affordable Housing Bill 2023
National Assembly clear 1.5pc housing levy on gross salary as MPs pass the controversial Affordable Housing Bill 2023.
The National Assembly approved the contentious Affordable Housing Bill 2023 on Wednesday, giving President William Ruto’s administration another legislative win.
The bill aims to allow the government to continue implementing the President’s pet homes program.
The Bill will put the decision to levy a 1.5 percent tax on employees’ gross salary into law. It will now be forwarded to the Senate for concurrence.
In his speech on Monday at a joint retreat for the legislators and executive of the ruling Kenya Kwanza coalition in Naivasha, the President expressed his desire for the Bill to be passed.
However, the passage of the Bill was not without opposition after about 20 Azimio la Umoja One Kenya Coalition MPs walked out of the House while it was being considered at the committee stage (third reading).
“Our members had amendments but it looks like there are instructions to pass the Bill as it is,” Minority Whip Junet Mohamed said, adding, “We have decided to walk out and let the matter be dealt with in the court of public opinion.”
The opposition MPs had sought to have the 1.5 percent levy imposed on basic or net salaries as opposed to gross monthly salaries.
“If you want to impose the levy on net salaries to reduce the amount, we will not support it,” said Kimani Ichung’wah, the National Assembly Majority Leader.
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Efforts by Githunguri MP Gathoni Wamuchomba to have the 1.5 percent levy removed from the Bill also failed, as did her attempts to have the National Housing Corporation (NHC) take charge of the affordable housing programme, rather than creating another body.
Ms Wamuchomba was concerned that creating another body would lead to duplication of roles.
The Bill was tabled in Parliament in December last year after the High Court ruled that the housing levy, which was introduced following an amendment to the Labour Act by the Finance Act 2023, was unfair, discriminatory, and unconstitutional as it limited the levy to formal sector employees.
The proposed law seeks to establish the Affordable Housing Fund, into which the levies deducted from salaries are to be paid, to be managed by a board of directors.
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