The Kenya Revenue Authority (KRA) has announced the reintroduction of the housing levy deductions days after President Wiliam Ruto assented the Affordable Housing Bill into law on March 19, 2024, at state house Nairobi.

In a statement on Thursday, March 21, KRA notified the public that it is the body mandated to collect the levy in line with the provisions of the Affordable Housing Act, 2024.

“We would like to inform the public that the Affordable Housing Act, 2024 designates KRA as the ‘Collector’ of the Affordable Housing Levy (AHL). This takes effect from 19th March 2024,” the authority noted.

Employers and Employees to remit 1.5% each to KRA

As such, KRA clarified that all employers are required to remit 1.5% of the employee’s gross monthly salary by the employee and One point five per centum (1.5%) of the employee’s monthly gross salary by the employer.

According to the KRA statement, employers remitting the fund will also be required to declare the AHL under sheet “M” of the PAYE return on the itax system.

Additionally, they are required to generate a payment slip under the tax head “agency revenue” and tax sub-head “Housing Levy”.

Payments, according to the statement, will be made at KRA agent banks or mobile money through eCitizen Paybill Number. 222 222 or by dialing *222#.

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At the same time, all other unemployed persons who receive income or whose income is accrued in Kenya are required to remit 1.5% of their gross income as the Affordable Housing Levy to KRA. 

The due date for remittance of the Affordable Housing Levy is the 9th working day after the end of the month in which the gross salary was due or gross income was received or accrued.

“Employers are therefore required to deduct the AHL from employees’ gross salary and remit it together with a matching contribution from the employer – 1.5% of the gross monthly salary for each employee,” read the statement.

KRA clarifies on deductions

“We are committed to ensuring that all individuals are supported in complying with this provision,” the authority stated.

In the statement, KRA clarified that resident individuals who pay the affordable housing levy shall be entitled to the affordable housing relief.

Any person who fails to comply with the law shall be liable to payment of a penalty equivalent to 3% of the unpaid funds for every month if the same remains unpaid.

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“KRA is committed to ensure all persons are optimally supported. We will continuously engage and collaborate with stakeholders to enhance compliance with the Affordable Housing Levy provisions,” the authority added.

Additionally, it notified taxpayers that it will not accept responsibility for payments not received, credited and validated in the relevant KRA accounts.