Kenya Gives Ascend to Housing Bill

March 20, 2024

(3 Minutes Read)

Ruto’s administration has imposed a slew of tax measures, which the citizens complained had increased the tax burden. President Ruto is aiming to construct 200,000 affordable housing units every year and hopes to create more than 600,000 jobs.

Kenya’s President William Ruto has signed into law the controversial housing bill to continue collecting a housing levy of 1.5% of a worker’s monthly pay. The levy aims to fund the construction of affordable housing for low-income citizens. It may be recalled that its implementation has sparked widespread criticism.

Opposition termed the levy of tax as an additional burden. Ruto’s administration has imposed a slew of tax measures, which the citizens complained had increased the tax burden. There were legal hurdles to the implementation of the bill as one judge halted deductions due to a lack of a proper legal framework. However, the bill was amended and ratified by Members of Parliament last week. The levy forms part of a broader finance law passed last June, which also saw a doubling of the sales tax on fuel. Additionally, a heightened health insurance levy is set to be introduced soon.

The government contends that bolstering tax revenues is essential to narrowing the budget deficit and funding essential public services. The authorities had begun deducting the 1.5% housing levy from salaries since last July. However, amid public anger, one activist took the government to court arguing successfully that it unfairly singled out Kenyans in the formal sector who get a regular monthly salary.

https://trendsnafrica.com/kenya-launches-program-for-enabling-farmers-to-access-high-yielding-rice-seeds/

The new law now extends the levy to other workers and now requires non-salaried Kenyans in the informal sector to pay the levy. The new law also establishes the Affordable Housing Fund, which is intended to manage the money the government will get from the levy. President Ruto is aiming to construct 200,000 affordable housing units every year and hopes to create more than 600,000 jobs.