Housing Levy Headache

The ministry of Transport , Infrastructure, Housing, Urban Development and Public Works inconjuction with the Kenya Revenue Authority, on 16th April released a public notice published in the dailies indicating that the provision of the Finance Act 2018 would take effect in May 2019.
Both the employer and the employee will be required to contribute 1.5% of the employees’ basic salary. The amount should not exceed KES 5000.
The Jubilee administration is looking to get KES 57B from about 2.5M salaried Kenyans annually to finance the housing project.
The Federation of Kenya Employers (FKE) through its CEO Jaqueline Mugo has stated that it had obtained a court order on the 8th April suspending the implementation of the tax levy.
President Uhuru Kenyatta, during his 2nd term indicated that he intended to work on four key agendas, Expanding manufacturing sector, Affordable housing, Affordable healthcare and food security. The housing levy is set to cater for affordable housing for the Kenyan growing population.
According to the Principal Secretary for Housing Charles Hinga, has indicated that through the project Kenyans will be able to own homes in over a period of 25 years. He further added that KES 17B will be availed to Technical and Vocational Institutions to enable build the capacity of the youth who will be involved in the housing project.
Following this announcement Kenyans online went crazy with outcries to declining the introduction of the government levy, with hash tags such as #ResistHousingFundLevy and #ResistingHousingTax carrying the day. Kenyans are of the idea that this is just another plan for more funds to be looted.
The labor court has temporarily suspended the introduction of the housing levy pending further negotiations into the tax.

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