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Attorney General Justin Muturi has said board members and directors of public and private firms will not pay the affordable housing levy after declaring that they are not employees.
Kenya Revenue Authority in a letter dated September 13, had said directors of State corporations and private companies were to pay the housing tax because they earn an income for rendering a service, like other workers.
"Therefore, affordable housing levy is applicable to all employees, including directors, notwithstanding their terms of engagement or contract," said KRA Deputy Commissioner for Policy and Tax Advisory, Esther Wahome.
Responding to a letter from Kenyatta National Hospital on whether their board members are eligible to pay housing levy, AG Muturi said they are not recognised as employees.
He explained that based on the Principle Act on Employment, the Employment Act, 2007 ("the Act"), Section 2 defines the term "employee" as a person employed for wages or a salary.
"Contrary to the position taken by KRA in its internal legal advisory, categorising board members as secondary employees, we are of the opinion that the same is not supported in law (the Employment Act) and is further alien to the reigning Jurisprudence," he said.
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