State defends new housing levies, as some Kenyans remain opposed

Top government officials have joined the push to endear the housing scheme to Kenyans which is pegged in the Finance Bill as a three per cent housing tax imposed on employees citing a host of benefits.

The move comes a day after President William Ruto held a Parliamentary Group meeting with Kenya Kwanza legislators in State House where he called on the lawmakers to pass the controversial 2023 Finance Bill when it is tabled in parliament.

A section of Kenyans and opposition leaders are opposed to this tax saying that it only adds pain to an already overtaxed Kenyans who are also grappling with the high cost of living.

If the bill is passed, every employee will contribute three per cent of the salary whereas the employer tops up with a similar amount.

The contribution is capped at Sh2,500 which is the highest contribution for those earning monthly salaries.

This means that those earning a salary of Sh30,000 will contribute Sh900 and the employer will match up the contribution with a similar amount.

State House spokesman Hussein Mohammed (pictured) said the government aims to close the two million housing deficit cumulatively which translates into 200,000 new houses annually in the urban areas.

Home ownership

The aim of the government, Mohammed said is to provide home ownership in the country, increase mortgage from the current Sh30,000 to Sh1million with favourable repayment terms of five per cent and affordable terms allowing monthly repayment of Sh5,000. 

He said that out of the 50,000 that are constructed each year only one per cent can be categorised as affordable housing.

While emphasising the need for Kenyans to embrace the government’s affordable housing scheme, Mohammed said that Kenya is rapidly becoming urbanised at 4.4 per cent urban growth annually translating into new 500,000 urban dwellers which overstretches the scant housing in urban areas

He said that 60 per cent of Kenyans live in slum areas under low-quality housing and poor sanitation which comprises their dignity and exposes them to health risks.

“With statistics showing that by 2050 seven out of 10 people will be living in urban areas, President William Ruto is of the view that bold steps to address the housing challenges must be taken now. We can’t continue burying our heads in the sand.