High Operational Costs To Lock Out Informal Sector From Housing Fund – PwC

High maintenance fees expected to be pegged on self-employed Kenyans will discourage them from participating in the government’s National Housing Development Fund initiative.

NHDF, introduced by Uhuru Kenyatta’s government as part of its Big Four agenda, have asked self-employed Kenyans, especially those in informal settlements, to voluntarily remit Ksh200 monthly for a chance to own a house in the future.

The Fund will utilise 50 per cent of the contributed fees to cover operational costs, with Ksh100 being member’s actual contribution.

“This fee also creates inequity since employees are not expressly required to make similar administrative contributions,” says the Tax Alert notification sent by PricewaterhouseCoopers.

In The Draft Housing Fund Regulations, 2018, released the cabinet secretary for Transport, Infrastructure, Housing, Urban Development and Public Works James Macharia, Kenyan’s earning Ksh14,999 will get social housing scheme.

For the salaried, employers and employees will each contribute 1.5 per cent of the employee’s monthly basic salary to the Fund with the combined contribution capped at Ksh5,000 per month.

Members who qualify for the affordable housing scheme are entitled to use the contributions which have accrued to them to finance the purchase of a home under the scheme. They can also apply for loans from the National Housing Corporation at an interest rate of up to 7 per annum, other rate gazetted by the NHC from time to time.

 

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By Kenyan Digest

The Kenyan Digest Team