Parliamentary Committee Implements Significant Revisions: 3% Housing Levy Reduced Alongside Two Other Amendments
If the National Assembly adopts the recommendations of its Finance and Planning Committee to reduce the housing tax, Kenyans will heave a sigh of relief.
The committee, which concluded a week of report writing on Sunday, June 11th, recommended a reduction of the housing levy from 3% to 1.5%.
In addition to the reduction, the committee led by Molo MP Kuria Kimani modified the proposed deductions’ remittance and implementation.
The Treasury proposed in the Finance Bill 2023 that every employee contribute 3% of their salary to the Housing Fund, with the employer matching the amount.
In the amendments, not only was the amount lowered to 1.5%, but employers were also exempt from matching the remittances.
Treasury had initially proposed that deductions begin on Thursday, June 15, but the Finance Committee proposed delaying the decision until January 2024.
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“You must find a way to recoup the costs associated with a significant amendment’s financial impact.
Kuria explained the reason for the delay by stating, “Otherwise, we will face a crisis where we have approved a project but have not allocated the necessary funds.”
The Molo MP explained that the delayed implementation of the levy. Would provide ample time for the government to enact the necessary laws and framework for the Finance Housing Fund.
While the committee provided a reprieve regarding the housing levy. It upheld the proposed 16 percent Value-Added Tax (VAT) on fuel.
In a previous interview on Sunday, May 14th. President William Ruto explained that the increased levy was crucial for his development agenda, particularly transport infrastructure.
“Money is required to complete these roads. Everywhere I go, Kenyans tell me they need roads, so the President defended his decision to double the fuel tax on the basis that they need roads.
National Assembly is anticipated to debate the Finance Bill on Tuesday, June 13. Two days before the Treasury presents the budget for the fiscal year 2023/2024.
Parliamentary Committee Implements Significant Revisions: 3% Housing Levy Reduced Alongside Two Other Amendments
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