In a recent tweet, Kericho Senator Aaron Cheruiyot has defended the Kenyan government’s decision to introduce a housing fund levy, stating that it is a necessary measure to create jobs and stimulate the local economy. According to the senator, the levy will not result in any significant increase in taxes for the majority of Kenyans who earn less than Ksh 500K per year.
The introduction of the housing fund levy has been a topic of controversy in Kenya, with some individuals and organizations opposing it. The levy, which is set at 1.5% of an individual’s basic salary, is aimed at raising funds to provide affordable housing for Kenyans. However, critics argue that the levy will burden Kenyan workers, especially those in low-income brackets.
Senator Cheruiyot’s statement seeks to allay these concerns by highlighting that the levy will not significantly increase taxes for the majority of Kenyans. He asserts that the levy is an economic measure that will create jobs and spur local economic growth, which will ultimately benefit all Kenyans.
The Kenya Kwanza government is exploring various measures to increase revenue to finance its 2023/24 budget. One of the proposals that have been put forward is the imposition of a 5% tax on wigs, false beards, and eyebrows. Other beauty products, such as eyelashes, switches, and artificial nails, would also be subject to the tax.
National Treasury Cabinet Secretary Njuguna Ndung’u is also proposing a 3% deduction of basic salaries towards the National Housing Development Fund, which employers would match. Those who are not eligible for the affordable housing program would be required to accumulate their savings for seven years before their first deductions.
The bill would also amend section 5 of the Income Tax Act, and employees’ per diem, or cash allowances, would be taxed. Furthermore, the government is seeking to amend the Employment Act to levy a 35% income tax on all monthly salaries above Sh500,000.
In addition to these proposals, the government is considering a 10% Excise Duty on fish imports, which could lead to price hikes. The proposed measures are aimed at increasing the government’s revenue streams and financing the budget in the coming fiscal year.
by: Zeke