Contradictory messages has left the government and the Federation of Kenya Employees (FKE) at loggerheads over the implementation of the housing levy.
While the government has directed that the new tax will be implemented in May, FKE has rebutted by calling the state’s move “unlawful”.
FKE Executive Director Jacqueline Mbogo said a public notice issued by the government that appeared in local dailies on April 16 is contrary to court orders still in force.
She said, “FKE attended court on the April 8, for the further mention of this case and obtained an extension of the court orders suspending the implementation of the Housing Levy upto May 20 when the case will come up again for mention for further directions from the Court on the Hearing and determination of this case.”
“The Gazette Notice is therefore unlawful and we shall keep you posted on any further developments.”
The FKE statement, issued to its federation members on April 16 was contrary to the state’s public notice that had indicated the housing tax was ready for lift off.
According to the public notice signed by Housing and Urban Development Principal Secretary Charles Hinga Mwaura and Kenya Revenue Authority (KRA) Commissioner-General John Njiraini, the new levy was meant to take effect and remitted alongside other employees’ tax by May 9.
The new tax places a 1.5% levy on employee’s salaries, meaning that with Kenyans earning an average of Ksh78,600, the government could raise Ksh1,179 on average from every employee per month.
However, a cap of Ksh5,000 is placed on the projected house levy, meaning those who earn around over Ksh330,000 per month will only see Ksh5,000 remitted from their salary, no matter the income.
The housing levy, according to the government, is a bid to raise cash for the affordable housing project, which is among President Uhuru Kenyatta’s Big Four Agenda.
During the State of the Nation address on April 4, President Kenyatta said that over 175,000 Kenyans had registered under the voluntary scheme known as “Boma Yangu” to be in line for allocation of houses.
He added that supply of certain components, such as doors and windows, to be done exclusively by local Micro, Small and Medium size enterprises.
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