The Kenya Revenue Authority (KRA) has announced that deductions for the Affordable Housing Levy (AHL) are set to commence on March 19, 2024.
According to a statement released by KRA, the Authority has been designated as the collector of the Affordable Housing Levy.
Starting from March 19, 2024, employers are mandated to deduct the AHL from their employees’ gross salaries. Additionally, employers must contribute 1.5 % of the gross monthly salary for each employee towards the AHL.
Furthermore, individuals earning income in Kenya are also required to remit 1.5 % of their gross income as the Affordable Housing Levy to KRA.
The deadline for remitting the Affordable Housing Levy is the ninth working day after the end of the month in which the gross salary was due or gross income was received or accrued.
KRA has provided clarification on the process for employers to declare and remit the AHL. Employers must declare the AHL under sheet “M” of the PAYE return on the iTax platform. They should generate a payment slip under the tax head “agency revenue” and tax sub-head “Housing Levy,” and proceed to make payments at KRA agent banks or through mobile money using eCitizen Paybill Number 222 222 or by dialling *222.
It’s worth noting that the employer’s contribution to the Affordable Housing Levy is considered an allowable deduction under Section 15 of the Income Tax Act.
KRA has also stated that resident individuals who pay the affordable housing levy will be entitled to affordable housing relief.
Failure to comply with the law regarding the Affordable Housing Levy will result in penalties. Any individual or entity failing to remit the levy will be subject to a penalty equivalent to three per cent of the unpaid funds for every month the amount remains outstanding.
