Nairobi — The National Assembly's (NA's) Finance and Planning Committee is proposing a reduction in the housing levy that is being proposed under the Finance Bill 2023.
The Kimani Kuria-led committee now wants the housing levy slashed by half to 1.5 percent from the current recommendation of 3 percent.
It is also advising that the levy be deducted from employees and not employers, effective January 2024.
"An amendment that has a huge financial implication, you must find a way of recouping that financial implication so that you are able now to fund a budget otherwise you are going to get into a crisis where we have approved a budget and we have not provided the resources to do it," the Chairman of the NA Finance Committee Kuria said during a public participation hearing in Naivasha over the weekend.
The 2023 Finance Bill, which will be tabled in Parliament tomorrow, proposes a 3 percent deduction for all salaried Kenyans, with employers matching the same amount for housing projects.
Pooled funds are part of President William Ruto's administration's agenda to actualize affordable housing for millions of Kenyans.
However, the tax has elicited criticism from employers and employees, who say the deduction will burden their already dwindling purchasing power amid high inflation.
