Teachers together with civil servants face looming housing fund deduction in this months salaries after amendment of the 2007 Employment Act to allow immediate deduction from employees salaries.
Clause 76 reads “76. The Employment Act, 2007 is amended by inserting the following new section immediately after section 31A-
31B 1) An employer shall pay to the National Housing Development Fund established under section 7 of the Housing Act, in respect of each employee-
(a) the employers contribution at three per centum of the employees monthly basic salary; and
(b) the employees contribution at three per centum of the employees monthly basic salary provided that the sum of the employer and employee contributions shall not exceed five thousand shillings a month.”
In the Finance Bill, 2023, which carries tax proposals for the 2023/24 financial year, the government is seeking more revenue through deductions.
President William Ruto had said the contribution will help teachers and civil servants purchase houses built under the Affordable Housing project.
He said that Kenyans will contribute the funds on a monthly basis.
“To enable many Kenyans buy houses under the affordable housing project, we have a housing fund to which we want every Kenyan to contribute 3 percent of their income. If you earn Sh10, 000, 3 percent is Sh300 every month goes towards the fund,” Ruto said.
“Every employee who saves 3 percent with the Housing Fund, the law will require their employer to also save 3 per cent,” Ruto said.
The President noted that almost 700,000 public servants in the country will be the first to start saving under the Housing Fund.
” Every civil servant who will save 3 per cent from their income will get 3 per cent of their salary from the government every month so that we can create a fund that will assist the people of Kenya to acquire homes,” Ruto said.
The President also said currently, there are only 40,000 mortgages in the country yet there are supposed to be up to 2 million mortgages to measure up to the size of the economy.
Ruto said many Kenyans are living in informal settlements and need an upgrade on the quality of houses they live in.
Ruto targets to build up to 100,000 houses in Nairobi as part of his affordable housing project.
Kenyans earning at least Sh500,000 monthly also face deeper tax chops as the Finance Bill proposes to raise their income tax from 30 per cent to 35 per cent.
This will see a worker earning Sh500,000, pay over Sh200,000 in tax. The proposal comes at a time when President Ruto has been hard on the wealthy, even hinting at introducing a wealth tax.
But the pain will not befall only the salaried as Treasury also proposes to raid Kenya’s digital content creators, an industry that has attracted the youth, offering an alternative to a population category hard hit by unemployment.
The Bill proposes a 15 per cent tax on payments relating to digital content monetisation, as a withholding tax. The tax will have huge implications on thousands of youth who currently earn a living from the digital space and comes when the government has been aggressively driving investment in internet connectivity and technology to attract the jobless.
“In respect of payments relating to digital content monetisation, 15 per cent (withholding tax),” the Bill proposes in relation to the sector.
Treasury has also proposed to raise turnover tax for businesses with revenues from as low as Sh500,000, from 1 per cent to 3 per cent, a move that will hit more businesses classified under small and medium-sized enterprises (SMEs), which may not be stable.
How soon the deductions commences is Mat, but how soon the first cohort foundation of the houses is laid, is upon God to decide!
Why should I need a house in the city when I live miles away in rural area. These so called cheap houses built through taxation will finally allocated to who? When rent is paid who will pocket the money? I don’t understand can we be to understand before deductions are made. Some of the payslips cannot meet the threshold for more deductions. TSC be warned.
I don’t understand all this.
I have already done savings and constructed my own house,I no longer need government help. Let the project be directed to those willing.
I wish this came before I voted
supposing you retire before the house is allocated to you. will the government refund that contribution you made? surely whom does this fund aim to benefit if it’s not the same politicians who grab the very government houses.
Is there increament before you deduct all these things that zakayo is coming up with
It’s soo painful,,some of the payslips can not allow,, I don’t understand either!!!
You can’t deduct nonexistent salaries…like my own is just a third which will go against the rule and again Mr president be confident of doing such if you have given us salary increments but no!
Can’t pay won’t pay!
Don’t send teachers into early graves please coz we do have our housing scheme by the way and some already committing suicide coz of financial instabilities. Teachers are suffering so much 😭
In kenya we don’t stay in apartments.We do our homes which are spacious and the location we want to stay.Its stealing from employees by forcing them pay for housing.How big is the house and which location is it.Let the government build houses using it’s money and sell to willing Kenyans.
Housing is not an immediate problem in kenya right now,why is the government rushing to get money from people for reasons not well understood?. Is it conning or what’s going on?
choices have consequences. let kenyans face what they voted for with many promises , little did they know they were to fund all the promises given to them from their meagre incomes. Am on the way to mama suluhu land .cant wait this raping on laborers pay slips happen. we were told hustlers would be given money to run small biasharas, why is the money? told crb would be done away with, still its very active and kicking very well. 3% +7.5% +30%+nhif+ minet +vat, this will translate to almost 50% of workers incomes. please executive arm of government you are burdening civil servants now. mps are only asleep no longer fights for common man interests any more. increase salaries by 30-40% then take your 6%. patriotic kenyan.
pole sana.So mlipeleka Raila Bondo😃
Stupid kenyans must pay dearly for voting in a useless government
Even that other government which you may think will help will still be useless!!
Let’s train ourselves on how to survive the hard times because it’s real.
Never think of a government that will supplying bread and butter😂😂
If nhif and nssf funds have been looted, how sure are we that housing fund will be protected?
Constitution is clear, where’s public participation, sensitive members first,our so called unions are sleeping on the job.As you rob workers money, where are our unions representative on fund board to guard members money.