Taxes–Kenya Revenue Authority KRA has today made an official announcement directing all employers in the country to start remitting housing levy as per the new Finance laws.
In an update made today Friday August 4, the tax man asked every employer in the country to deduct the housing levy as stipulated in the Finance Act 2023 and remit it without any delays.
In a backdated notice delivered to the public today, the deductions are supposed to take effect from July 1 20-23.
“KRA would like to inform members of the Public that with effect from 1st July 2023, all Employers are required to deduct the Affordable Housing Levy from the employee’s gross salary and remit together with the employer’s contribution,” partly read the notice dated August 4.
The said deductions required by the taxman include 1.5 percent of the employee gross salary and a 1.5 percent of the employees gross salary by the employer.
The employers’ contribution to the housing levy is an allowable deduction under Section 15 of the Income Tax Act laws of Kenya.
“An employer who fails to comply with the law shall be liable to payment of a penalty equivalent to two percent of the unpaid funds for every month if the same remains unpaid,” the statement also read.
The orders are in line with the controversial Finance Act that was cleared at the Court of Appeal level despite protests by a section of Kenyans and opposition leaders.
Busia Senator Okiya Omtatah’s case flopped at the Appellate Court after the three-judge bench sided with the government saying the continued suspension of the Act could affect service delivery.
