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Affordable Housing

Kenya’s 1.5% Housing Levy Sparks Anger

There has been an angry response in Kenya to a decision by the authorities to introduce a new salary levy to help build low-cost homes.

From next month, employees will pay 1.5% of their pay to the housing fund and that amount will be matched by the employer.

The anger stems from suspicion that the extra money could be lost through corruption, correspondents say.

The government aims to build 500,000 affordable homes by 2022.

The total monthly payment per person will not exceed $50 (£38), but it is hoped that $500m will be raised every year.

The Federation of Kenya Employers (FKE) says the move to introduce the levy is against a court order, which suspended its introduction pending a hearing on the FKE’s objection.

A trade union umbrella body has also opposed the money-raising move.

Is it a tax?

President Uhuru Kenyatta wants his second term in office, which began in November 2017, to be defined by what he has called the big four: universal healthcare, improving food security, boosting manufacturing and building affordable housing,

The housing levy has been called a tax but at the end of last year Mr Kenyatta said “this is not about tax as it has been made to look, but a saving and a contribution towards owning a house”, the Star newspaper quoted him as saying.

One consumer rights organisation questioned whether people should be forced to pay the levy, adding in a tweet that the “government has no history of successfully managing any ‘fund'”.

Many on Twitter questioned where the money would go, with the suggestion that the government tackle corruption first.

READ MORE:  Facebook Commits $1B to Help Tackle California's Affordable Housing Crisis

Others questioned how they could afford the levy while also facing a rise in the cost of living

Source: BBC

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