PS Hinga: Why housing levy contribution should be mandatory

Housing and Urban Development Principal Secretary Charles Hinga has come out to explain why the contentious housing levy contribution under the Finance Bill, 2023, should be made mandatory.

Addressing journalists at State House in Nairobi on Wednesday, Hinga said the levy will serve as assurance to investors the government seeks to engage in putting up houses.

“Some of you are asking why can’t we make this voluntary? But when it is driven by law, if I’m going to get a billion a month, it means I can go out there and call investors and tell them that as long as the law is there, I will be collecting money after three years,” he said.

While likening it to the fuel levy paid by Kenyans, the PS said the government could not have built roads if it did not have a certainty of cash flow every month to present to road construction companies.

“We went to the markets and told them to give us a lot of money today we build roads and in the next 15 years we will be paying that levy and we will be able to pay you out. If we didn’t have that, they would tell us we can’t afford that,” he explained.

“The highest-earning Kenyans will only pay Ksh.2,500, the majority will pay Ksh.1,000 and below. So when we put this all together as a country, we will be able to go out to the market and tell investors that the government is providing land at no cost for Kenyans to own homes, build houses in mass, give me the keys and go. If I don’t have the housing fund, they will refuse to build.”

PS Hinga said Kenya benchmarked with Singapore, Mexico, Brazil, Nigeria and China before tabling the proposal.

“Sometimes to know how not to do it, and they said let us save together; they told their employer save this and I will save that,” said the PS.

A section of Kenyans have been calling for the housing levy to be made a voluntary contribution.

The proposal wants employees to pay three per cent of their monthly salaries to support President William Ruto’s ambitious plan to provide affordable housing to Kenyans.