Housing Fund Seeks Stronger KRA Powers to Recover Unremitted Levy Contributions

Housing authorities are pushing for tougher enforcement of the Affordable Housing Levy. They want KRA to be given legal authority to recover billions of shillings deducted from workers' salaries but allegedly not remitted by employers.

The Affordable Housing Fund Board has asked Parliament to amend the law to empower the Kenya Revenue Authority (KRA) to pursue unpaid housing levy contributions in the same way it recovers outstanding taxes.

Appearing before the National Assembly’s Finance and National Planning Committee, Board Chairperson Jeremiah Simu said the proposed changes in the Finance Bill 2026 would allow the KRA Commissioner General to treat unremitted levy deductions as civil debt owed to the government and initiate recovery measures against defaulting employers.

According to Simu, the fund continues to lose revenue because some employers deduct the levy from employees’ salaries but fail to transfer the money to the Affordable Housing Fund. He told lawmakers that the losses amount to about Sh3 million every month.

Under the Affordable Housing Levy Fund Act, 2024, employers are required to deduct 1.5 percent of an employee’s salary and match the contribution before remitting the funds to support the government’s affordable housing programme.

However, Simu argued that while KRA is mandated to collect the levy, the current legal framework does not grant it sufficient powers to audit, assess or recover unpaid amounts. He noted that existing provisions only impose penalties but do not provide a clear enforcement mechanism for collecting outstanding contributions.

The proposal comes as housing authorities seek to strengthen compliance and safeguard levy collections intended to finance the construction of affordable housing units across the country.

If approved, the amendments would give KRA a more direct role in pursuing employers who fail to remit deductions already collected from workers.