alexa We must not backslide to the days of oppressive taxation - Daily Nation

We must not backslide to the days of oppressive taxation

Wednesday April 24 2019


Housing Principal Secretary Charles Hinga comments during a housing forum at KICC on August 31, 2018. Mr Hinga has emerged as the pre-eminent and most passionate champion of the affordable housing project. PHOTO | FILE | NATION MEDIA GROUP 

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Mr Charles Hinga, the Principal Secretary for Housing, is the public face of the plan by the government to introduce the controversial housing levy.

An eloquent public speaker with a rare gift of the gab, Mr Hinga has emerged as the pre-eminent and most passionate champion of the affordable housing project.

Whenever he is called to address a conference on affordable housing, the message delivered comes with the sophistry of a televangelist.

I must confess that I have found Mr Hinga’s presentations and speeches on the project very enjoyable. In most cases, the semantics will be modern and contemporary, the message replete with the jargon of investment bankers.

In a recent interview, Mr Hinga spoke about introducing ‘bulk housing aggregators’ and about installing an ‘online housing demand portal to mitigate developer market risk’.



Admittedly, using jargon when speaking makes public officials sound glib, slick, even clever.

But what these guys forget is that public policy, especially where you are imposing new levies and taxes on an already overtaxed populace, requires one to speak clearly and plainly.

Too much jargon and the penchant to the project’s design as slick and sophisticated must be one of the reasons why the positive messages about this project did not register in the mind of the taxpayer.

While everyone was on cloud nine, touting the project as the greatest game changer ever to visit Kenya, Wanjiku was not only left out of the party, but was also left to ponder simple questions that required plain answers.

If I’m already paying a mortgage, is it really fair for the government to raid my meagre salary to deduct money I’m planning to spend on something else?


I took a loan several years ago from my Sacco to buy a piece of land on which I’m planning to build a house from another loan I’m taking after repaying the first one.

Is it fair for the government to raid my payslip by imposing deductions that will interfere with my plans?

Since I’m about to retire and only have a few years of work remaining, why should I be forced into an arrangement that is clearly structured to benefit and give advantage to individuals who plan to remain and stay in salaried employment for a long time?

Is this a contribution or just a plain tax? If the money to be deducted is a contribution as Mr Hinga and company are insisting, is it not just fair — in the interest of transparency — that the rules of managing and governing long-term saving schemes, such us pensions, should be made to kick in first before any deductions can be effected from salaries?

If we are talking about contributions, then the government must publish clear investment guidelines to assure salaried employees that the Ministry of Housing will not touch this money and that it be kept with custodians, only invested by competitively appointed fund managers.


What the taxpayer is being asked is to pay and then wait for 15 years to participate in a lottery to access the benefit.

Put differently, the taxpayer is being asked to join a scheme where benefits will be distributed among persons selected according to a yardstick not well-defined, by a procedure not clearly formulated, in a process managed and controlled by bureaucrats and public officials who are not conspicuous for integrity.

With the idea facing stiff opposition and resistance to it becoming widespread, chances are that this unpopular tax may come a cropper.

And without the levy, bedrock of the financing model of proposed National Housing Fund, we may as well kiss the much-vaunted affordable housing project goodbye.

The levy is critical to the success and feasibility of the affordable housing project because it was designed to be the only source of stable funds for the project.


Without the levy, the only sources of funds conceived are unreliable sources such as short-term loans and endowments from the government and revenues from existing housing projects.

Clearly, these unpredictable sources of funds will not meet the bill, given the scope and the scale — especially the number of houses and mortgages promised.

If the government is serious about affordable housing, let it come up with a better funding model.

We have for a long time been running a successful bond programme that has allowed the government to borrow 20-year-old money. The problem is that the government borrows 20-year-old money and then uses it to pay salaries.

We even borrow Eurobonds and use the resources to pay for the expanding waist lines of civil servants, governors, MPs and MCAs’.

We need an affordable housing scheme with sustainable funding arrangements.

When you introduce new taxes to an overtaxed populace, you risk destroying taxpayer morale — a delicate, but valuable, national asset. We must not backslide to the days of oppressive taxation.