KRA now targets casual workers, board members in housing levy deductions

This means employers with casual workers earning weekly wages will be required to deduct 1.5% from their gross pay and remit to the Kenya Revenue Authority (KRA). 

The move ropes in even those employed as construction workers in the scheme.

KRA will also be targeting directors of companies earning sitting allowances whenever they hold meetings as the Kenya Kwanza government sets eyes on delivering 200,000 units per year.

“Salaries paid to casuals for services provided for a period of time are also subject to Affordable Housing Levy (AHL). Thus, AHL applies to all employees with contracts of service irrespective of the terms,” KRA’s Deputy Commissioner for Policy and Tax Advisory Esther Wahome said.

Those hustling between two jobs will also not be spared from the levy that the government projects to grow by more than Ksh30 billion in the next three years. Both employers will be required to separately submit the 1.5% deduction from the pay slip of the same individual under the same KRA PIN number.

President William Ruto has repeatedly fashioned the housing scheme and the tax burden as a way to create casual jobs for the millions of jobless youths in the country; it turns out, they too will be taxed to build more houses.

KRA anchors its move to target casuals on the Employment Act  2007 which defines an employee as a ‘a person employed for wages or salary and includes an apprentice and indentured learner.’

The levy is now targeting even those given regular cash allowances like the board of directors who earn after each sitting, usually four times a year or less.

It will however be difficult to enforce compliance for those paying cash allowances to staff like weekly entertainment allowances as some companies will heavily rely on paying cash to avoid the compliance process which will come at a cost.

Employees began paying the backdated levy in their August salaries after the courts delayed its inaugural deduction in July.