Ruto proposes new bill to salvage housing levy
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Ruto administration tables new bill in the parliament to salvage the controversial housing levy which was declared unconstitutional
Ruto administration tables new bill in the parliament to salvage the controversial housing levy which was declared unconstitutional.
In an attempt to prevent the courts from potentially repealing the contentious housing levy, the administration has introduced a bill in Parliament to save the controversial tax.
Majority Leader Kimani Ichung’wah on Thursday tabled the Affordable Housing Bill 2023, weeks after the High Court declared the levy charged at 1.5 percent of the gross salary of an employee unconstitutional.
This comes after a High Court three-judge Bench last month declared the housing levy unconstitutional for being discriminatory and creating unequal principles, dealing a blow to President William Ruto’s housing programme.
However, the court suspended the ruling, a decision that allows the government to continue collecting the levy until January 10, 2024, when a final ruling will be issued.
The new bill seeks to create a legal framework to oversee the Affordable Housing Levy.
The bill has retained the 1.5 per cent deductions from employees’ salaries and an additional 1.5 per cent from the employers for every employee on their payroll.
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The new bill makes it express that the monies collected will not be deposited in the consolidated fund and will only be used to set up affordable houses.
The fund further establishes a board that will run the fund and will include PSs from the Treasury and Housing departments, nominees from the Council of Governors (CoG), COTU and the Federation of Kenya Employers.
The bill has further set guidelines on who qualifies for what category of houses.
Those earning below Ksh.20,000 will get houses that measure between 18 to 30 square meters while those earning up to Ksh.149,000 will be allocated double the size.
The bill, in addition, proposes to have 30 % of the housing levy channelled to the National Housing Corporation, 30% for slum upgrading and 36 per cent for affordable housing.
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