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Big 4 housing levy ‘not a tax’, but way of helping Kenyans save – Uhuru

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Kenyans should view the 1.5 per cent Big Four Housing levy as a way of helping them save, rather than a tax, President Uhuru Kenyatta has said.

Speaking during a round table with journalists at State House, Mombasa, the President said, “We are not forcing agenda on people, but we are in talks so that we can present the ideas for them to contemplate on.”

“New programmes suffer misgivings and clarity but let those who are not sure about the agenda speak out and tell us their fears, all we are encouraging a saving culture versus spending culture.”

Uhuru said there has been a lot of misinformation on the 1.5 per cent contribution towards the affordable housing.

“I want to assure Kenyans that this is not about tax as it has been made to look, but a saving and a contribution towards owning a house.”

However, a journalist took Uhuru to task, saying saving is voluntary, but the levy will be compulsorily deducted from workers’ salaries. 

Employers were supposed to start deducting 1.5 per cent of staff’s gross salary every month.

However, the deduction was suspended pending the determination of a case filed by Cotu, which said it’s unconstitutional and amounts to double taxation.

Through lawyer Okweh Achiando, Cotu Secretary General Francis Atwoli told the court that the levy on the basic salary of employees has far-reaching implications on the right to fair remuneration.

Read: Uhuru’s housing tax plan puzzle

He further argued that proper regulations to guide the implementation of the levy are not in place.

“The petitioner is aggrieved that its unconstitutional and legally invalid to subject Kenyans to double taxation by imposing the 1.5% housing development levy on basic salaries,” Atwoli said.

Cotu further contends that there was no public participation in the Amendment of the Employment Act which was to come into effect on January 1, 2019.

The deductions would see Treasury raise Sh57 billion annually from workers to finance the proposed National Housing Development Fund.

The affordable housing project which seeks to build 500,000 houses by 2022 is one of President Uhuru Kenyatta’s Big Four Agenda alongside manufacturing, universal health coverage and food security.

The orders will remain in office till January 21, 2018.

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