Gov’t backdates Housing Levy deductions to July 1

The government has backdated the mandatory contribution towards the Housing Fund proposed in the Finance Act, 2023 to July 1.

This is after the Appellate Court last week temporarily lifted conservatory orders barring the implementation of the contentious Act, paving the way for the government to implement critical taxes that had been put on hold following the Act's suspension late last month.

Through a public notice on Wednesday, the Ministry of Lands, Public Works, Housing and Urban Development said the levy is now in effect from July.

“The levy is payable by the employee and employer at a rate of one point five per centum of the employee's gross monthly salary by the employee, and one point five per centum of the employee's monthly gross salary by the employer, as outlined in the Finance Act 2023,” read the notice.

This translates to high-income earners of more than Ksh.500,000 a month being charged tax at 32.5 per cent for monies up to Ksh.800,000, while those above Ksh.800,000 will be charged 35 per cent on the extra cash.

“This shall be remitted by the employer not later than nine working days after the end of the month in which the payments are due,” the Ministry said.

At the same time, the government has appointed the Kenya Revenue Authority (KRA) as the collection agent.

“KRA will issue a communication advising on the mode of collection,” the notice added.