Finance Bill 2024: Kenyan Govt Proposes 15% Relief On Housing Levy

• According to proposals in the Finance Bill 2024, employees will pay less tax overall since they will receive a 15% relief on the affordable housing levy
• For instance, an employee earning KSh 50,000 and contributing KSh 750 as a housing levy will receive a relief of KSh 112.50
• High-income earners taking home KSh 4 million monthly and paying a levy of KSh 60,000 will be entitled to a relief of KSh 9,000

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

Kenyan workers will receive relief if the new proposed amendments to the Affordable Housing Act are passed.

In new proposals in the Finance Bill 2024, employees will receive 15% relief on the affordable housing levy, reducing the tax paid by each worker.

"The amount of affordable housing relief shall be 15% of the employee's contribution but shall not exceed KSh 108,000 per annum," the bill states.

For instance, an employee earning KSh 50,000 and contributing KSh 750 as a housing levy will receive a relief of KSh 112.50.

High-income earners taking home KSh 4 million monthly and paying a levy of KSh 60,000 will be entitled to a relief of KSh 9,000.

How will KRA determine the income of non-salaried people?

Tax expert Kipkemboi Rotuk said the Kenya Revenue Authority (KRA) did not clarify how it will ascertain the income of non-salaried people and apportion it to a specific natural person.

"As the AHA clearly envisages universal contribution by all natural persons universally with or without a salary on the other sources of income, the correct strategy would be for the collector, the Kenya Revenue Authority, to wait for the voluntary disclosure and declaration to ascertain the non-salary portion of other incomes declared by all natural persons registered taxpayers," Rotuk told TUKO.co.ke.

Rotuk opined that in the frenzy of complying with court orders, the government erroneously failed to define the term “person”, thus lumping every other income of a person, which now ropes in every registered taxpayer in Kenya with a PIN.

When did the affordable housing levy take effect?

• President William Ruto assented to the new Affordable Housing Bill 2024 on Tuesday, March 19, at Statehouse Nairobi.
• The new law provides that the affordable housing levy will be charged at the rate of 1.5% of the gross income of a business or an individual and a matching contribution of the same amount in cases of employers.
• It also provides for a double taxation check by exempting persons who pay the matching contributions from paying the levy on their gross salary.

Proofreading by Nyambura Guthua, journalist and copy editor at TUKO.co.ke