Housing levy: Workers now risk losing their cash in revised tax plan
Police officers arresting protestors outside Parliament Buildings in Nairobi on June 13, 2023, during the tabling of the Finance Bill 2023 in Parliament.
Workers may lose their money in the controversial Housing Fund if Parliament approves a fresh proposal to scrap a clause requiring the State to offer refunds to contributors who miss out on affordable homes after seven years.
The National Assembly Finance and Planning Committee has recommended an amendment in the Finance Bill, 2023 to convert the housing fund into a levy, which effectively means that the money will not be refunded after it is collected.
“Cognizant of this and objections raised by the shareholders, the committee agreed to amend the proposal on Housing Fund by making it a levy as opposed to a contribution so that the funds can be appropriated directly to fund the housing initiative under the Bottom-Up Economic Transformation Agenda,” said the chairperson of the Finance and Planning Committee Kuria Kimani.
“In response to the stakeholders’ submissions, the rate was reduced to a manageable rate of 1.5 percent.”
Housing and Urban Development Principal Secretary Charles Hinga said he was awaiting the report from the committee.
“I’m waiting to see the proposal as this is not part of the Executive,” said Mr Hinga. But Nikhil Hira, a tax expert, noted that in the Finance Bill, workers were to contribute to a fund “where if you don’t require an affordable house, your money will be earning interest for seven years.”
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