Live Markets, Charts & Financial News

Fresh housing levy deductions start in March

0 66
Economy

Fresh housing levy deductions start in March


President William Ruto when he assented to the Affordable Housing Bill at State House, Nairobi on March 19, 2024. PHOTO | PCS

The affordable housing levy will be deducted from the March payslips, a new directive from the Kenya Revenue Authority (KRA) says.

Guidelines on the collection of the affordable housing levy issued by the taxman say the deductions are effective Tuesday, March 19th, 2024.

“With effect from 19th March 2024, all employers are required to deduct the affordable housing levy (AHL) from the employee’s gross salary and remit together with the employer’s contribution (of one point five per cent (1.5 per cent) of the employee’s gross monthly salary,” said the KRA in a public notice.

Read: No reprieve for Kenyans as housing Bill is passed in Senate

The KRA has also set the due date to remit the affordable housing levy as the 9th working day of the following month in which the gross salary was due or gross income was received or accrued. Under the new law, Kenyans in the informal sector and others not salaried will pay 1.5 per cent of their monthly gross earnings to fund the government’s housing programme.

The new legislation is roping in workers in the informal sector to comply with the High Court ruling that rendered the earlier Act unconstitutional last year. The court termed the levy unfair, discriminatory, and unconstitutional, because it limited the contributions to salaried employees in the formal sector.

Read: State nets Sh26.8bn from housing levy amid legal row

KRA directed all employers to declare the AHL under sheet “M” of the Pay as You Earn (PAYE) return on itax; generate a payment slip under the tax head “agency revenue” and tax sub-head “Housing Levy”; and make payments at KRA agent banks or mobile money through eCitizen Paybill Number 222 222 or by dialling *222#.

“Any person who fails to comply with the law shall be liable to payment of a penalty equivalent to three per cent (3 per cent) of the unpaid funds for every month if the same remains unpaid,” added KRA.

→ (email protected)

Leave A Reply

Your email address will not be published.