The Kenya Revenue Authority (KRA) has officially initiated housing levy deductions for the government’s affordable housing project, effective from March 19. Employers are mandated to deduct 1.5% from employees’ gross salaries and remit it alongside a corresponding 1.5% contribution for each employee.
Furthermore, all individuals earning income in Kenya are obligated to remit 1.5% of their gross income as housing levy to KRA. The levy’s remittance deadline is set for the ninth working day following the end of each month.
Employers are instructed to make housing levy payments at KRA agent banks or through mobile money using the eCitizen Paybill Number 222 222 or USSD code *222#.
KRA emphasized that failure to comply with the law will result in penalties, amounting to three percent (3%) of the unpaid funds per month.
President William Ruto signed the Affordable Housing Bill into law on Tuesday, enabling the reinstatement of housing levy deductions. The levy had previously faced legal challenges, being declared unconstitutional by the High Court in 2023, with the Court of Appeal upholding the decision due to the absence of a legal framework.
Ruto’s government asserts that the suspension period allowed for the bill’s restructuring, providing a new legal basis for the levy.
Despite this, a new petition has been filed, contesting the law’s validity on grounds of introducing communist ideologies and allegedly centralizing housing functions under the national government, thereby challenging the autonomy of county governments.
