At the end of April, Kenyan employees could start their monthly contributions toward the Housing Fund. This is according to a notice published in the dailies by the Kenya Revenue Authority and the Ministry in charge of Housing.
However, the Chief Executive of the Federation of Kenyan Employers, Jacqueline Mugo has stated that the notice is illegal as the matter is in Court.
As per the government notice, the 1.5 percent of basic salary deductions will be made at the end of every month alongside other statutory deductions such as NHIF and NSSF payments. Employers are also required to contribute the same amount as their employees by the 9th of each following month.
The money collected will be used to fund the Government’s affordable housing program. In the end, the Govt envisions that workers will be able to acquire affordable houses or have their contributions transferred to a pension firm, or given as cash to the contributor, their
In 2018, the trade union organization, COTU, and the Federation of Kenyan Employers went to court to stop the law on housing levies from being enacted. The two organizations claim that Kenyan workers are already overtaxed. The federation of employers recently opposed the move highlighting the many companies that have left Kenya due to high operating costs. The body warned that more companies could leave the country if the Housing Fund Levy comes into effect resulting in more cases of unemployment.