The hurdle for government’s housing fund levy is yet to be removed, as the Federation of Kenya Employers (FKE) battles its implementation.
In a statement, FKE said that court orders suspending the implementation of the levy is still on, up to the May 20, 2019 when the case will come up again for mention.
“The Federation of Kenya Employers (FKE) attended Court on April 8, 2019 for the further mention of this case and obtained an extension of the Court Orders suspending the implementation of the Housing Levy up to the 20th of May 2019 when the case will come up again for mention for further directions from the Court on the Hearing and determination of this case,” the statement reads in part.
Today, the government issued a public notice through the local dailies informing employees and employers of the implementation meant to start on or before May 9.
The government said that both the employer and the employee shall each contribute 1.5 percent of the employee’s monthly basic salary.
This is in line with the Finance Act 2018, where the total amount contributed shall not exceed Ksh5,000.
“The employers are required to deduct and remit the levy together with other statutory levies from both the employer and the employee by the 9th of each succeeding month together with other payrol statutory deductions,” announced the government.
Central Organization of Trade Unions (Cotu) had opposed the idea and even successfully petitioned against its implementation.
However, the suspension was lifted after the government reached an agreement with the Franci Atwoli-led Cotu.
“We had injunctions that halted the process but the parties have agreed to withdraw them so we are ready to proceed with the project,” Mr Macharia said.
The tax scheme is expected to generate about Sh57 billion annually from about 2.5 million salaried Kenyans. Additional revenue is expected to come from voluntary contributors.