Nyeri Town MP Mathenge breaks with Ruto, wants housing levy made voluntary

Nyeri Town MP, Duncan Mathenge has broken with President William Ruto and now wants Parliament to amend the housing levy proposed under the Finance Bill, 2023 and make it voluntary.

President Ruto has proposed and is pushing for Members of Parliament to pass the plan that will see government deduct 3% from civil servants’ salaries to cater for housing.

Speaking to Citizen TV’s Sam Gituku during the Day Break show on Tuesday, the MP was asked for his position on the levy that has rocked Kenyans and caused divided opinions.

“We could change; we could amend the issue to the contribution to the housing fund and make it voluntary for those that feel it is attractive,” said Mathenge.

MP Mathenge was in a panel alongside National Assembly Deputy Minority leader Robert Mbui, Luanda MP Dick Maungu and Nominated Senator Veronica Maina contested proposals in the bill.

The Kenya Kwanza-allied MP is the first legislator in the President William Ruto-led alliance to publicly challenge the bill as it is.

The housing levy, a proposal made by President Ruto, was not only aimed at helping Kenyans acquire homes but also at creating employment opportunities for Kenyan youth.

The president defended the levy by stating that social housing is geared toward low-income individuals, especially those from unincorporated communities like Kibra, where they will be able to rent better homes for an inexpensive price.

“The proposed 3% is not from the entire salary, but rather from the basic salary. And this money is not tax. You are only giving us your money for a period of time to help create more job opportunities by initiating these projects. It is a win-win situation,” said the Head of State.

Duncan Mathenge – MP, Nyeri Town: At the end of 7yrs, the savings in the Finance Bill will have doubled. The Finance bill has a principle and under it, there are regulations.@SamGituku: That is not in the bill, how will it double?

Mathenge: An individual will contribute 3%,… pic.twitter.com/8GABbHruT5

However, criticism for the financial levy has arisen from a section of Kenyans who say that the timing of the new proposed levy is ill-informed given the turbulent economic situation in the country.

Opposition leader Raila Odinga has voiced his opinion by stating that the levy should be made voluntary and that the additional tax will be a burden to Kenyans.

Starting May 2023, the Kenyan government ordered all companies to withhold 1.5 per cent of their employees' monthly wages as housing levy contributions.

This is an additional 1.5 per cent from what was being deducted previously under the Finance Act 2018.

Therefore, it is a requirement of all organizations' employers to withhold and remit the money for each consecutive month. Employers and employees must each contribute 1.5% of their monthly salaries up to Ksh.5,000.

Employees will utilize the payments to pay for the purchase of homes under the ambitious affordable housing program of the Ruto administration, which seeks to build up to 250,000 low-cost dwellings annually.