Employers Face Tough Fines in Proposed Bill for Housing Levy Non-Payment
The government has proposed stiff penalties for employers who fail to remit the housing levy deductions.
The stringent measures to compel employers to remit the levy to the government are contained in a proposed Bill sponsored by National Assembly Majority Kaimani Ichung’wah.
The Affordable Housing Bill, of 2023 wants employers to pay three percent of the unpaid amount for every month in arrears.
The penalty has been revised upwards by one percent from the two percent that was proposed in the Finance Bill, 2023 now an Act of Parliament.
The Bill introduced for first reading on a day the house took a long Christmas break seeks to anchor the 1.5 percent Housing Levy on salaried Kenyans.
The proposed law also seeks to put in place legal structures governing the administration of the Fund.
“Where an amount of the Levy remains unpaid after the date when it becomes due and payable by a person liable to remit the amount, a penalty equal to three percent of the unpaid amount shall be due and payable for each month or part thereof that the amount remains unpaid and shall be summarily recovered as a civil debt from the person liable to remit the amount,” reads the Bill in part.
“The levy shall be at the rate of one point five percent of the gross salary of an employer or the gross income of a person received or accrued which is not subject to the levy,” added the Bill.
The Inchung’wah Bill further seeks to give effect to Article 43 (1)(b) on the right to accessible and affordable housing.
It further seeks to give effect to Article 43 (1)(b) of the constitution on the right to accessible and adequate housing.
The Bill requires employers to remit the 1.5 percent housing levy deducted from employees to the government in nine days to fund the affordable housing scheme. Employers top-up within the same period.
This new development comes at a time High Court has halted the whole housing concept terming it unconstitutional.
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Judges Lawrence Mugambi, Christine Meoli, and David Majanja last week ruled that the introduction of the levy was discriminatory since it imposed taxes on salaried Kenyans alone and excluded those working in the informal sector.
“…That levy against persons in formal employment with the exclusion of other non-formal without justification, discriminatory, irrational, arbitrary and in violation of Articles 27, 201 of the constitution,” Justice Majanja said.
The court however granted stay orders on the implementation of the judgment that rendered the Housing Levy unconstitutional.
The Bill also creates an Affordable Housing Board that will be responsible for the management of the housing units.
The Composition of the Board includes a non-executive chairperson appointed by the President, PS Treasury, and PS of state department responsible for housing.
The Board will also have three other persons, not public officers, who shall possess qualifications in the built environment, finance, or law.
Three other persons shall be appointed by the Cabinet Secretary of whom, one shall be a nominee of the Council of County Governors, one a nominee of the Central Organization of Trade Unions, and one nominee from the Federation of Kenyan Employers.
It will also consist of the Chief Executive Officer who shall have no right to vote at a meeting of the board.
Employers Face Tough Fines in Proposed Bill for Housing Levy Non-Payment
