Housing and Urban Development Principal Secretary Charles Hinga has come out to explain the criteria that the government will use to identify and collect housinvg levy from non-salaried kenyans.
Speaking on Citizen TV, the PS noted that the Housing Levy Deductions will commence this month whereas employers have until April 9 to submit their deductions to the Kenya Revenue Authority (KRA).
However, concerns were raised on the mechanisms the State intends to employ in identifying non-salaried workers and Kenyans operating in the informal sector whose incomes will also be subject to deductions under the scheme.
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Hinga said that the state identified the two categories of non-salaried kenyans. The first category being those kenyans who work in firms like lawyers and architects.
“The first category are the likes of lawyers, and architects who work in firms where they don’t earn a salary so either there is a partnership fee or consultancy fee so what they do is submit their returns at the end of the year. So they get the gross income minus the expenditure plus whatever reliefs they get and they pay KRA.”
The second category is the majority which includes BodaBoda riders, businessmen and mama mbogas which the PS said that will be contribute the housing levy through the Turnover Tax (TOT) already imposed on them by KRA.
“We looked at the 1.5 percent for guys in the informal sector who already have 3 percent turnover tax. So part of this bill sought to give them relief so that if you added 1.5 percent to the gross it was going to be 4.5 percent. What the State has done is to forego the 1.5 percent for the informal but they still have to remit it towards the levy.”
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According to the PS, even kenyans who don’t want to own houses have a responsibility to pay for the housing levy insisting that it’s mandatory and the deductions will start immediately for all.
“The boda boda guys still have a responsibility to pay even if they don’t want to own a house. Everybody has a responsibility to pay. The deductions will take effect immediately for non-salaried workers as well.”