The Kenya Revenue Authority has asked school heads to deduct and remit 1.5% of the gross salary of their employees to KRA. This is on BoM Housing Levy Contribution
The taxman is currently pursuing Headteachers and principals who have failed to to remit the 1.5% BoM Housing Levy Contribution by their BoM teachers.
Most schools rely heavily on BoM teachers who supply the extra needed manpower in the teaching fraternity. This is to supplement the teachers swnt to schools by TSC. Therefore the principals have been compelled to enaure that each employee is cut the 1.5% of gross income and channel the money to the tax authority.
In order to Cement the directive, KRA now wants salaries of those who have not paid to be withheld till they comply. This is in arrears of July and October this year.
The 1.5% Housing Levy Contribution according to KRA was effective since July 1st and most schools and staff have not complied to the directive. In addition, those who have not complied should do so with immediate effect.
With this trend, starting January, most schools will be hosts of the taxman who will be aiming to check files and ensure that the directive is followed. This puts principals in between a rock and a hard place following late disbursement of capitation. READ: Principals Complain after State Dismissed Fee increment Reports
“The levy will be deducted by employers from employees gross salary and be remitted to Kenya Revenue Authority together with the employers contribution,” stated a notice addressed to secondary school heads in Vihiga and Kakamega counties by the KRA Department for Domestic Taxes.
According to KRA, there will be consequences to schools and principals including Headteachers who fail to deduct the levy.
Previously, the finance act required employees to contribute 3% of their salaries to the Housing Levy. But later ammendments required the employees to contribute 1.5% and the rest to be contributed by the employer.