Housing levy is a tax, says Finance Committee chair Kuria Kimani

National Assembly Finance and Planning Committee Chairperson and Molo MP Kuria Kimani. [Courtesy, Twitter]

National Assembly Finance and Planning Committee Chairperson Kuria Kimani now says that the Housing Fund, proposed as a levy in the Finance Bill 2023, will now be implemented as a tax.

Speaking during an interview on Citizen TV on Tuesday, June 13, Kimani explained that the decision to change it to a tax was made in response to the requests and feedback received from Kenyans during the public participation exercise on the proposed Finance Bill.

"The housing levy is no longer levy; it is a tax. We are ring-fencing it to make sure it goes to building affordable housing," the committee chair said.

The Molo MP added that the houses that would be built using the housing fund would be constructed by the State Department of Housing and not private investors as earlier indicated.

He also confirmed that the Housing levy contribution by employers and employees has been reduced from three to 1.5 per cent, effective as soon as the President ascends to the Bill if it passes through parliament.

Kitui Central MP Makali Mulu seemed to be reading from a similar script, saying the government should consider making the housing levy a tax.

"The idea of making it a tax is important so that when I give my money, I give it and forget about it. Let Kenyans who have no houses get houses; so that the government supports the housing program without telling people they will get their money back," said Mulu.

The Bill is currently being debated on the floor of the House.

Kimani's statement contradicts that of the President and Housing Principal Secretary Charles Hinga, who has previously emphasised that the Housing fund will be a levy, not a tax.

In a previous interview on Spice FM, Hinga stated that the Housing Fund is not a tax; rather, it is a form of savings.

The PS called upon Kenyans to support the housing levy proposed in the Finance Bill, 2023, stating that it would provide an opportunity for many to afford decent housing.

"We need to engage in thoughtful discussions and assess the effectiveness of our proposed solutions. Are our strategies viable?" Hinga posed.

Hinga clarified that the decision to implement the housing levy was made to address the persistent housing problem, which has resulted in a growing number of informal settlements, currently totalling 1,400.