16 April 2019

Kenya: Employers Lobby Says Housing Levy Gazette Notice Illegal

The Federation of Kenya Employers (FKE) has rejected the planned deduction of housing levy from workers by the government starting this month.

FKE Executive Director Jacqueline Mugo on Tuesday urged employers not to implement the policy as directed by the Housing ministry and the Kenya Revenue Authority.

"The notice by the Ministry of Transport, Infrastructure, Housing, Urban Development and Public Works in conjunction with Kenya Revenue Authority has issued a go-head on the implementation of the Housing Fund Levy with effect from May 9, 2019. This is contrary to the court orders which are still in force," said Ms Mugo in a statement.

Ms Mugo said FKE attended court on April 8, 2019, and obtained an order suspending the implementation of the levy until May 20, when the case will be mentioned.

"The Gazette notice is therefore unlawful and we shall keep you posted on any further developments," said the FKE boss.

SH5,000 MAX

In a newspaper advertisement on Tuesday, the Housing ministry and KRA announced that the housing fund levy "has come into effect", meaning every employed Kenyan must remit 1.5 per cent of their basic salary for April to the National Housing Development Fund.

Employers are also required to send a figure matching the employees' deductions to the Housing fund.

"The employers are required to deduct and remit the levy together with other statutory levies from both the employer and the employee by the 9th of each succeeding month together with other payroll statutory deductions. The first contribution shall be due by May 9, 2019," the advertisement stated.

The deduction became law by the enactment of the Finance Act 2018 that followed the budget statement presented to Parliament by Treasury Cabinet Secretary Henry Rotich.


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