Gov’t backdates Housing Levy deductions to July 1
The
government has backdated the mandatory contribution towards the Housing Fund
proposed in the Finance Act, 2023 to July 1.
This is after the Appellate Court last week temporarily
lifted conservatory orders barring the implementation of the contentious Act, paving
the way for the government to implement critical taxes that had been put on
hold following the Act's suspension late last month.
Through a public notice on Wednesday, the Ministry of Lands, Public
Works, Housing and Urban Development said the levy is now in effect from July.
“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,” read the notice.
This translates to high-income earners of more than Ksh.500,000
a month being charged tax at 32.5 per cent for monies up to Ksh.800,000, while those
above Ksh.800,000 will be charged 35 per cent on the extra cash.
“This
shall be remitted by the employer not later than nine working days after the
end of the month in which the payments are due,” the Ministry said.
At
the same time, the government has appointed the Kenya Revenue Authority (KRA)
as the collection agent.
“KRA
will issue a communication advising on the mode of collection,” the notice
added.
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