Kenyans will from this month pay the mandatory housing levy as President William Ruto signed the controversial Bill into law.
Ruto on Tuesday, March 19, 2024, assented to the Affordable Housing Bill, after it was passed by both Houses of Parliament last week, albeit with opposition from Azimio lawmakers who termed it unconstitutional.
While signing the Bill into law, the President was clad in construction costume and was surrounded by top government officials and construction workers.
The signing of the Bill into law now means Kenyans will from this month pay the housing levy.
This means the 1.5 per cent tax from both the employer and the employee will take effect at the end of the month.
The courts had abolished the levy but the Kenya Kwanza administration quickly moved to have it back through legislation.
In November last year, the High Court ruled that the housing levy was introduced without a legal framework.
In January 2024, the Court of Appeal declined to suspend the High Court order.
With the court blow, the government was forced to come up with a new legal framework - Affordable Housing Bill, 2023 - in order to address issues raised by the courts.
To address the issues raised by the court, the Bill has expanded the imposition of the monthly 1.5 per cent affordable housing levy to include incomes other than salaries paid to employees in the formal employment sector.
The Affordable Housing Bill (National Assembly Bill No. 75 of 2023) was published on December 4, 2023, vide Kenya Gazette Supplement No. 236 of 2023 of December 4, 2023.
The Bill was read for the first time on December 7, 2023, in the National Assembly and committed to a Joint Committee of the departmental committees on Finance and National Planning; and that of Housing, Urban Planning and Public Works.
The Joint Committee conducted extensive public participation across 19 counties. The Bill was passed by the National Assembly on February 21, 2024, after which the Speaker of the National Assembly transmitted it to the Speaker of the Senate.
The Senate conducted public participation too and passed the Bill on March 12, 2024, with amendments.
The National Assembly agreed to the Senate amendments and consequently passed the Bill without amendments on March 14, 2024 - paving the way for Ruto to sign it into law.
Both salaried and income-earning Kenyans will now pay a 1.5 per cent housing levy in the new Affordable Housing law.
