Housing tax pain deepens as KRA goes for allowances in gross pay
Principal Secretary State Department for Housing and Urban Development Mr Charles Hinga during a past event.
Photo credit: File | Nation Media Group
The taxman has directed employers to use gross pay when calculating what to deduct from staff salaries as housing levy, revealing the hidden pain for workers in the controversial tax starting this month.
The directive, which has sent shockwaves across human resource departments, means that the Kenya Revenue Authority (KRA) will require that allowances paid to staff such as hardship, travel, airtime and car allowances be included while making monthly computations.
The allowances had been left out in the initial draft Finance Bill, which provided for a housing fund.
