KRA Issues First Notice to Kenyans Over Housing Levy

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Friday, August 4, 2023 –Kenya Revenue Authority KRA has made an official announcement asking all employers in the country to start remitting housing levy as per the new laws.

In an update made today Friday August 4, the tax man asked every employer to deduct the housing levy as stipulated in the Finance Act 2023 and remit it without any delays.

In a backdated notice seen by Homenews.co.ke, the deductions are supposed to take effect from July 1, 2023.

“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.

KRA clarified that 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 seen by this writer further reads.

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Finance Act that was cleared at the Court of Appeal level despite protests by a section of Kenyans who wanted the taxes repealed.

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 will have dire Financial consequences to the country.

For that reason, the three judges said, for the government to carry on with its development activities, there was an urgent need to allow implementation of the Act.

Petitioners led by Okiya Omtatah, have however, promised to soldier on until certain sections in the Act are expunged from the new tax laws.

Pundits say, it will be interesting to see how this back and forth concludes, at long last.

https://twitter.com/KRACorporate/status/1687355999756185600?s=20