The Kenya Revenue Authority (KRA) on Friday, August 4 announced that the state will deduct Affordable Housing Levy from the employees’ salaries with effect from July 1.
In a notice, KRA informed the public that the Cabinet Secretary, Ministry of Lands, Public Works, Housing and Urban Development appointed the Authority as the collecting Agent of the Housing Levy.
“With effect from July 1, 2023, all Employers are required to deduct the Affordable Housing Levy – AHL from the employee’s gross salary and remit together with the employer’s contribution as follows:
One point five percent (1.5%) of the employee’s gross monthly salary by the employee: One point five percent (1.5%) of the employee’s monthly gross salary by the employer,” read part of the notice.
Further, KRA noted that the employer’s contribution to the Affordable Housing Levy is an allowable deduction under Section 15 of the Income Tax Act.
“KRA wishes to clarify that all employers are required to declare the AHL under sheet “M” of the PAYE return on itax and generate a payment slip under the tax head “agency revenue” and tax sub-head “Housing Levy” and make payments at KRA agent banks or mobile money,” read the notice.
In addition, KRA warned that an employer who fails to comply with the law shall be liable to payment of a penalty equivalent to two per cent of the unpaid funds for every month if the same remains unpaid.
“KRA is committed to ensure employers are optimally supported and will continuously engage and collaborate with stakeholders to enhance compliance with the Affordable Housing Levy provisions,” said the Authority.
The public are advised to call our Contact Centre on: Telephone No: 0204999999/0711099999, or Email: [email protected] for further information and inquiries.
Also Read: Salaried Kenyans Stare at Double Taxes Ahead of Finance Act Verdict
CS Lands Notice on Affordable Housing Levy
The Ministry of Lands on Thursday, August 3 issued a notice on the deduction of the Housing Levy, which is one of the proposals contained in the Finance Act 2023.
In a notice in the local dailies, the State Department for Housing and Urban Development informed Kenyans that KRA will be the collector of the Affordable Housing Levy.
Moreover, the Ministry directed employers to remit the deductions not later than nine working days after the end of the month in which the payments are due.
Also Read: Govt Gives Direction on Housing Levy Imposed on Employed Kenyans
Court of Appeal Ruling on Housing Levy
The Court of Appeal on Friday, July 28 lifted the order suspending the implementation of Finance Act 2023 until the appeal is heard and determined.
This allowed the National Treasury to implement the Act that seeks to increase revenue collection to fund President William Ruto’s Ksh3.6 trillion budget.
