The Finance and Planning Committee has provided Kenyans with some relief by reducing the housing levy contribution by half. In their weekly report completed on June 11, the committee suggested lowering the housing levy from 3% to 1.5%. This decision came after the committee reviewed numerous petitions from the public highlighting oppressive clauses.
Molo MP Kimani Kuria, who leads the committee, stated that they had reached an agreement on all the clauses and made amendments based on the public’s petitions. Alongside reducing the housing levy, the committee also proposed changes regarding the remittance and implementation of the deductions. Employers were excused from matching the remittances, and the levy’s implementation was deferred until January 2024 to allow the government to formulate relevant laws.
Kuria emphasized the need to address the financial implications of such amendments to avoid a crisis. The delayed rollout of the contribution would grant the Kenya Kwanza government ample time to enact appropriate laws for managing the Finance Housing Fund. The National Treasury initially intended for the deductions to take effect from July 1, 2023.
However, the committee retained the proposed 16% Value Added Tax (VAT) on fuel. The Finance Bill, which incorporates these changes, is scheduled for debate in the National Assembly on June 13, just two days before Treasury CS Njuguna Ndung’u announces the 2023/2024 budget.