What exactly is the Kenyan housing levy?
House levy in Kenya.Proposed housing levy kenya.The Finance Bill 2023 includes a proposal from the National Treasury to impose a 3% housing levy on an employee’s base wage up to a maximum of Sh2,500. Companies/Employer will contribute an additional 3%, up to a maximum of Sh2,500, of their employees’ contributions.
Recommendations On House Levy
The National Assembly Finance Committee has recommended that the Housing Fund levy proposed by President William Ruto’s administration be reduced from 3% to 1.5% .
The proposed levy has been met with mixed reactions from Kenyans who are concerned about over-taxation .
The levy, contained in the Kenya Financial Bill 2023, has faced opposition from both employees and labour unions who claim that they are already overburdened .
President Ruto has argued that the levy is necessary to improve the quality of life of many families who live in deplorable informal settlements and to avoid further urbanisation in the future .
However, some political leaders who supported the program under former President Uhuru Kenyatta’s term are now resisting it under President Ruto .
While it was initially proposed as a mandatory contribution, Kenyatta later made the contribution voluntary in response to pushback from Parliament and the courts .
Additionally,The Parliament Committee recommends reduction of proposed VAT tax for online content creators from 15% to 5%.
Who will be eligible for Housing Fund deduction?
According to the NA committee, the recommendations were made that civil servants, and formal employees to be deducted.
The President in his address to the nation in the past, mentioned of over 700,000 civil servants who it will start with.
Proposed housing levy kenya
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