Kenyans will pay Sh200 per month to the National Housing Development Fund, according to new proposed regulations published by the State.
The amendments are contained in the National Housing Development Fund Regulations 2020. The regulations are set to be tabled before Parliament for adoption.
Under the new regulations, salaried workers will not be forced to contribute 1.5 per cent of their gross salary as housing levy as was earlier proposed.
“Every member shall contribute a minimum of two hundred shillings per month to the National Housing Development Fund and the contributions shall be immediately credited to the member’s individual account as provided for under regulation 9,” the regulations proposed by the Ministry of Housing read in part.
They further state that a deceased member’s contribution shall be paid to the dependants.
The deceased member’s contribution payable will also be equal in value to the member’s National Housing Development Fund Account and interest accrued, according to the proposed regulations.
“Subject to any other written law, a benefit payable by the National Housing Development Fund upon the death of a member shall not form part of the assets in the estate of a member,” says the proposed regulations.
The new changes come barely a few months after President Uhuru Kenyatta directed the National Treasury and the Ministry of Housing to make the necessary changes to the Housing Fund Levy and table them before Parliament for adoption.
The levy was a key plank of the President’s ambitious ‘Big Four Agenda’ to provide 500,000 affordable houses by 2022, but court cases stalled its implementation.
Under the Finance Act 2018, workers were supposed to contribute 1.5 per cent of their basic salary monthly – provided the total contributions did not exceed Sh5,000 – to the National Housing Development Fund. Employers were to match each worker’s contribution.
They were required to deduct and remit the levy by the 9th of each succeeding month effective May 9.
The 1.5 per cent levy on salaries was expected to generate about Sh57 billion a year, from about 2.5 million salaried Kenyans, with additional revenue expected to come from voluntary contributors, who will be putting in a minimum of Sh200 into the fund per month.
The deductions were, however, opposed by several agencies, including the Federation of Kenya Employer (FKE).
FKE maintained that imposition of the mandatory levy on companies and workers would lead to more pressure on employers and result in difficulties in negotiations, leading to job cuts.