In a significant move, the National Assembly has passed the Affordable Housing Bill 2023, a key initiative of President William Ruto’s administration aimed at rejuvenating the country’s housing sector. The bill, which is now set for consideration by the Senate, includes provisions for a 1.5 percent levy on workers’ gross pay to fund the government’s affordable housing program.
The decision to pass the Bill aligns with directives set forth by President Ruto during a recent joint retreat for members of the ruling Kenya Kwanza coalition and the Executive. Despite opposition from some quarters, including a walkout by approximately 20 MPs from the Azimio la Umoja One Kenya Coalition during the committee stage, the Bill garnered sufficient support to move forward.
Notably, concerns were raised regarding the imposition of the levy on gross monthly salaries rather than basic or net salaries. However, proponents of the Bill, including National Assembly Majority Leader Kimani Ichung’wah, argued for the necessity of this approach to ensure adequate funding for the affordable housing initiative.
Efforts to introduce amendments to the Bill, such as entrusting the National Housing Corporation (NHC) with program management or altering the levy provision, were ultimately unsuccessful during the legislative process.
The Bill, tabled in Parliament following a High Court ruling that found the previous housing levy unconstitutional, seeks to establish the Affordable Housing Fund. This fund will serve as the repository for levies deducted from various income sources, extending beyond formal sector salaries to address previous legal challenges.
Despite the passage of the Bill by the National Assembly, opposition MPs have signaled their intent to challenge its legality once it receives presidential assent. Meanwhile, the government has allocated a substantial budget of Sh73 billion in the current fiscal year to support the affordable housing initiative, demonstrating its commitment to addressing housing challenges in the country.
As the Bill advances to the Senate for further consideration, its fate remains uncertain, with stakeholders closely monitoring developments surrounding this pivotal legislation.
photo source: Google
By: Montel Kamau
Serrari Financial Analyst
22nd February, 2024
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