Deductions towards the Affordable Housing Programme are a tax, not a savings, according to a clarification released by the Ministry of Lands, Housing and Urban Development.
The clarification seeks to quell the firestorm that emerged on Wednesday after the Lands Cabinet Secretary, Alice Wahome, confirmed that the current 1.5 per cent deduction on Housing Levy is a tax and not a saving. In the clarification statement shared with Kenyans.co.ke, the government says that while originally the National Assembly Finance Act introduced the Housing Fund, which was initially a savings contribution scheme, towards the Affordable Housing Programme, that was repealed by Parliament. "In March 2024, the National Assembly passed a law transitioning the Housing Fund into the Housing Levy, which is a tax every employed Kenyan is required to fulfill," reads part of the explainer.
Lands CS Alice Wahome speaking during a consultative meeting between state and non-state actors on community land registration and governance at Panafric Hotel, Nairobi, January 28, 2025.
Photo Ministry of Lands Following the new laws' passage, the deduction rate was reduced to 1.5 per cent per contributor, and the levy shifted to tax. "This provision took effect upon the Act's assent on 19 March 2024, requiring employers to begin deducting and remitting the Levy from March 2024 onwards," the government said.
