- May 7, 2024
- Posted by: admin
- Category: Uncategorized
A Housing Levy Synopsis
Following the declaration by the Courts of law that the housing levy was illegal, Parliament drafted the Affordable Housing Act, that came into force in March 2024.
The Act reframed housing levy to include all persons, unlike the previous laws that had targeted employees and their employees
The Act retained housing levy at 1.5% of the gross income.
Housing levy is applicable to:
1) Employment Income:
4. (1) There is imposed a levy known as the Affordable Housing Levy.
(2) The Levy shall be at the rate of one point five percent of—
(a)the gross salary of an employee; or
Employers are obligated to deduct , match the employee contribution and submit the same to KRA by 9th of the following month.
5. (1) An employer shall—
(a)deduct and remit the amount referred to in section
4(2)(a) from the gross salary of an employee; and
(b)remit an amount equivalent to the amount deducted under section 4(2)(a), to the collector(Matching Contribution)
2)Business Income
4. (1) There is imposed a levy known as the Affordable Housing Levy.
(2) The Levy shall be at the rate of one point five percent of—
(b)the gross income of a person received or accrued which is not subject to the Levy under paragraph(a).(All other incomes that are not employment income)
However , Section 5(2) of the Act exempts businesses/persons that comply with AHL on employees from paying AHL on gross income/Sales
5. (1) An employer shall—
(a)deduct and remit the amount referred to in section
4(2)(a) from the gross salary of an employee; and
(b)remit an amount equivalent to the amount
deducted under section 4(2)(a), to the collector. Obligation of an employer
.(2) Without prejudice to the generality of section 6, any person who complies with the provisions of section 5 shall not be liable to pay the levy under section 4(2) (b).