EDITORIAL: Housing levy rush is replete with pitfalls

The government is once again on the spot for pushing down the throat of Kenyan taxpayers what it considers to be a noble initiative.

Granted, decent housing is desirable and has the support of everyone.

We note that the Labour court on Wednesday temporarily stopped the implementation of the universal housing scheme to allow for consolidation of suits challenging it.

At least three organisations — the Federation of Kenya Employers, Central Organisation of Trade Unions (Cotu) and Consumer Federation of Kenya (Cofek) — have filed suits against the levy.

The scheme, which will be funded through a 1.5 per cent deduction from every formal worker’s salary, has raised eyebrows because the government appears to be in a rush to collect the Sh57 billion a year that is at stake.

That is no pocket change; it should have convinced stakeholders that the investment is worthwhile. That this has not been done explains the resistance.

The trust gap arises from several concerns. Foremost, the programme has not been explained well to the shop stewards to get the workers’ buy-in.

Besides, employers are expected to match their staffers’ contributions, but they are yet to be engaged fully on what is certainly an added cost of doing business.

Secondly, the transition from a contributor to a homeowner is not clearly defined.

On paper, private developers will build houses and sell them to the government for amounts ranging from Sh600,000 to Sh3 million.

A lottery will then determine which applicant is allocated the house with those who miss out eligible for cashbacks.

Distributing houses by chance — given our experience, where resources are allocated through corrupt, who-knows-who and other dubious criteria — is unlikely to win the confidence of workers.

Similar fears have been raised by developers, who believe several favoured investors have front-run the scheme and have plans ready for execution as soon as deductions begin.

And mega corruption, which has always bedevilled government initiatives, undermining citizens’ benefits, cannot be wished away.

To get broad support, the government should suspend deductions until the cases are heard and determined.

Also, it should engage stakeholders, communicate clearly and agree on a governance framework that offers appropriate safeguards against abuse.

Thirdly, it should bring in credible development partners to fund the initiative and offer tax concessions to lessen the burden on taxpayers.

Finally, the implementation should be detached from President Uhuru Kenyatta’s 2022 exit.

The last thing taxpayers want is the Housing Fund going the path of plunder — like the NSSF and NHIF.