Kenyans Told to Expect Lower Salaries

The Kenyan Revenue Authority has announced that the housing fund levy has now come into effect, meaning every employed Kenyan must remit 1.5% of their basic salary for April to the National Housing Development Fund.

This will mean that if a person’s basic salary is Sh50,000, around Sh750 of this will be retained by their employer to be remitted to the Housing fund. In addition, the employer will also pay Sh750, meaning the company will send Sh1,500 to the National Housing Development Fund.

The government promises employees whose salaries will be deducted that their levies will put them at a position to “finance the purchase of a home under the affordable housing scheme” as stated in the Act.

For those who will be ineligible to purchase a home, the legislation says their deductions will — after 15 years from the date of first deduction — be transferred into pension money or be transferrable to a beneficiary.

The government pledged to build 500,000 new affordable homes by the end of its tenure in 2022.

Tuesday’s advertisement, which was signed by the Housing principal secretary and the KRA commissioner-general, did not make reference to a case that the Central Organisation of Trade Unions (Cotu) filed last year to challenge the levy.