Kenya Govt In About-Turn on Finance Bill's Housing Levy

President William Ruto on Monday, June 12, 2023 bowed to pressure and slashed the Housing Fund levy by half, from the current 3% to 1.5%. Reducing the percentage of the levy contained in the Finance Bill 2023 comes as a direct response to the widespread public outcry, with a considerable number of Kenyans expressing strong opposition to the scheme, Davis Ayega reports for Capital FM.

Kenya's parliament sat to deliberate on the controversial Finance Bill 2023 when it resumed on Monday June 12, 2023. The original bill proposed a 3% tax on employees that would have been matched by employers.

At the time, Deputy President Rigathi Gachagua asked governors to support the Finance Bill as the tax measures would help raise revenue to fund counties, Capital FM reported. The deputy president said that the Kenya Kwanza administration had made a conscious decision not to borrow money to pay salaries, opting for locally collected taxes for that purpose.

The controversial bill which had undergone public scrutiny, set off a political storm in the country due to the new tax proposals. The opposition Azimio coalition led by former presidential candidate Raila Odinga, claimed that the proposed tax measures by President Ruto were targetting Mt Kenya region.

President William Ruto at the time defended the contentious housing levy - part of the Finance Bill - which he said at the time, would assist in bridging the country's housing deficit. The president chastised politicians who he said "are out to demonise" an otherwise good agenda. He had called for the housing programme to be separated from politics.