Employers failing to remit housing levy deductions may face fines of up to three percent of the unpaid amount, according to a new bill introduced in the National Assembly.
The bill, titled the Affordable Housing Bill, aims to regularize housing levy deductions after a previous High Court ruling deemed the tax unconstitutional. The proposed legislation outlines the management of levies, criteria for ownership, and the establishment of an Affordable Housing Fund managed by a board.
The bill stipulates that individuals who fail to remit the housing levy on time will be subject to a penalty of three percent of the unpaid amount for each month or part thereof that it remains outstanding.
To address concerns of discrimination, the government has expanded the tax bracket to include incomes beyond monthly salaries, with a levy rate of 1.5 percent of the gross salary or gross income not subject to the levy.
Leader of Majority Kimani Ichung’wah introduced the bill, emphasizing its alignment with Article 43(1)(b) of the Constitution on the right to accessible and adequate housing. The legislation aims to facilitate affordable housing provision and establish a legal framework for affordable housing programs and projects.
The bill’s introduction follows the High Court’s declaration of the housing levy as unconstitutional on November 28. The court ruled the levy discriminatory, as it exclusively targeted those in formal employment. Despite the ruling, stay orders have been granted until January 10, 2024.
To expedite the bill’s enactment within the 45-day timeframe granted by the High Court, MPs have proposed reducing the publication period from 14 days to three days.
The bill also outlines criteria for interested individuals to own a home, requiring applicants to be Kenyan citizens, at least 18 years old, and holding a Kenyan identity card. Preference for housing unit allocation will be given to marginalized groups, vulnerable individuals, youth, women, and persons with disabilities. The bill will undergo public participation before further proceedings.
