Parliament Committee To Reduce 3% Housing Levy To 1.5%

The National Assembly Finance and Planning Committee has proposed several amendments to a number of contentious clauses in the finance bill 2023.

The committee, which winded up a weekly-long report writing on Sunday, June 11, recommended the housing levy be reduced from 3 percent to 1.5 percent.

The committee led by Molo MP Kimani Kuria also recommended that the monthly deductions be subjected to employees only.

The committee recommended that its implementation be also deferred to January 2024 in order to put in place a water-tight legal framework ahead of its implementation. The Levy was the main talking point in the Finance Bill 2023 public participation hearing.

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In the amendments, not only was the amount reduced to 1.5 percent but also employers were recused from matching the remittances.

Initially, the Treasury had proposed that the deductions kick in on Thursday, June 15, but the Finance Committee proposed that the decision be deferred to January 2024.

“For an amendment that has a huge financial implication, you must find a way of recouping that implication.

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“Otherwise, we are going to get a crisis where we have approved and we have not provided the resources to do so,” Kuria explained the reason behind the deferment.

Kuria recommended the implementation of the kitty be pushed to January 2024, allowing time for proper legislation and framework around it.

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However, the National Assembly Finance Committee has recommended the retention of the 16% VAT on Petroleum products.

With the Finance Bill 2023 set for Tabling in parliament on Tuesday, the second reading of the bill on the floor of the house is expected on Wednesday after the approval of the House Business Committee.

President William Ruto said the housing fund will be contributed by 3% of the basic salary plus an additional 3% from the employer.

“If I have to complete these roads, I need money. Everywhere I go, Kenyans tell me they need roads,” the President defended his decision to double fuel VAT.

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