Mandatory Housing levy contributions proposed in the Finance Act, 2023 have been backdated to July 1.
This is according to a notice issued by the Ministry of Lands, Public Works, Housing and Urban Development.
The move by the Ministry comes after the Court of Appeal lifted orders suspending the Finance Act of 2023 allowing the National Treasury's plan to raise more taxes to implement the Ksh3.6 trillion budget.
“The levy is payable by the employee and employer at a rate of one point five per centum of the employee's gross monthly salary by the employee, and one point five per centum of the employee's monthly gross salary by the employer, as outlined in the Finance Act 2023,” part of the notice read.
The ministry says the monies will be collected by the Kenya Revenue Authority (KRA).
“KRA will issue a communication advising on the mode of collection,” the notice added.
The 1.5 per cent levy payable by both the employer and employee "...shall be remitted by the employer not later than nine working days after the end of the month in which the payments are due.”
With the levy in place, high-income earners of more than Ksh500,000 to Ksh800,000 a month will pay 32.5 per cent tax while those above Ksh800,000 will be subjected to 35 per cent tax an increase from the previous maximum tax on salary which was 30 per cent.
