NAIROBI, Kenya, May 7 – The Kenya Revenue Authority (KRA) has directed employers and individuals across the country to remit housing levy deductions by May 9, 2024.
The taxman also reminded employers that the Affordable Housing Levy (AHL) will be charged at the rate of 1.5 percent, including gross rental income and sales receipts (the amount chargeable to turnover tax).
“The Kenya Revenue Authority recognizes and appreciates your invaluable contribution to Government of Kenya revenue mobilization,” KRA announced in a letter to employers in the region.
“The Affordable Housing Act 2024 introduced Affordable Housing Levy (AHL) for all persons. This is therefore, to remind you to remit the AHL by the due date of 9th of every month, starting this month of May 2024.”
AHL, which was assented into law by President William Ruto in March this year, mandates employers to deduct 1.5 percent of gross salaries from employers with employees matching similar amounts. It also applies to those in the informal sector.
The law drew ire from Kenyans, who accused the government of overtaxing them despite tough economic times.
In its response, however, the state backed the program while saying that it would allow Kenyans to own affordable houses.
In the six months to December 2023, for example, data shows that workers and employers contributed Sh26.8 billion under the levy despite legal challenges at the time.
In November last year, the High Court declared the levy illegal but allowed the state to keep collecting deductions until January 10, 2024.
However, on January 26, 2024, the Supreme Court stopped the state from collecting the funds, terming it unconstitutional.
To comply with the High Court’s ruling on the illegality of the AHL, which was limited to salaried employees and not all workers, the Parliament amended the act to include those in the informal sector.
After passing the legal hurdle, the president signed the act into law.
