The Kenya Revenue Authority (KRA) has surpassed its Affordable Housing Levy collection target, raising Ksh73.2 billion in the last financial year. This figure is Ksh10 billion higher than the projected Ksh63.2 billion, translating to 115% performance against the set target.
The overcollection reflects improved compliance among employed Kenyans, despite ongoing debates and legal challenges surrounding the mandatory deductions. Since its rollout in March 2024, employers have been required to deduct 1.5% of gross salaries monthly and remit the funds to KRA by the 9th working day of the following month.
While the levy has sparked controversy, the government maintains that the contributions are vital for national development. Nearly half of the collected funds remain unutilized, with the state gradually rolling out affordable housing projects in phases. To maximize value, the government has begun investing the surplus funds in Treasury bills and bonds, generating additional returns while projects progress.
President William Ruto recently defended the levy during a groundbreaking ceremony at Tom Mboya University in Homa Bay, where student hostels are being constructed under the housing initiative. He emphasized that the program goes beyond affordable homes, extending to the construction of 400 new markets across Kenya and student accommodation facilities.
“People have been asking me about the Housing Levy Fund. This is the transformation it will bring to us as a nation,” Ruto said, underscoring the initiative’s role in addressing housing shortages and spurring infrastructure development.
Despite widespread public concern over statutory deductions, the government insists the levy is crucial in tackling Kenya’s housing deficit and promoting economic growth. As the program unfolds, attention will now shift to how efficiently the collected funds are utilized to deliver tangible results for Kenyans.
