Important Notice: Continuation of Affordable Housing Levy Deductions


In light of the recent court directive, which mandates the continuation of funding for the Affordable Housing Levy until January 10, 2024, despite its initial declaration of unconstitutionality, several key elements and procedures have been outlined for employers to adhere to. The directive stipulates a deduction percentage of 1.5% from the gross pay of employees, with a corresponding contribution from the employer at an equivalent rate.

This court-mandated funding initiative is aimed at sustaining the Affordable Housing Levy and ensuring its continued implementation. Employers are now legally obligated to deduct the specified percentage from their employees' gross pay and promptly remit these funds to the Kenya Revenue Authority, as explicitly outlined by the Ministry of Housing and Urban Development.

The Ministry, in its directive, emphasizes the mandatory nature of this process, underscoring that all employers are required to comply with the deduction and remittance of the Affordable Housing Levy. Non-compliance with this legal obligation carries significant consequences for employers. In the event of failure to adhere to these directives, employers may be subject to penalties. Specifically, a penalty equivalent to two percent of the unpaid funds will be imposed for every month the payment remains outstanding.

This comprehensive framework aims to ensure strict adherence to the continuation of funding for the Affordable Housing Levy, promoting compliance among employers and safeguarding the effective implementation of this initiative until the specified date of January 10, 2024. Employers must familiarize themselves with these legal obligations, implement the required deductions, and remit the funds promptly to avoid potential penalties and legal repercussions.

Book a Free consultation with us here

Visit our website to learn more

 

 

 

 

Comments

Post a Comment

Popular posts from this blog

Clarification On Taxation Of Meals Provided By Employers

Image
Background:  The Kenya Revenue Authority (KRA) issued a Technical Circular (Ref: 1005/1) in March 2017, outlining guidelines for the taxation of employment income, particularly regarding benefits provided to employees. Among these benefits, the circular stated that meals provided to employees up to a value of Kshs. 48,000 per year per employee were not subject to tax, in accordance with Section 5(4)(f) of the Income Tax Act. Clarification:  Recently, there has been confusion regarding the interpretation and application of this provision. The KRA has clarified that if an employer provides meals exceeding the value of Kshs. 48,000 per annum per employee, the entire value of the meal becomes taxable income for the employee. Essentially, any amount spent on meals beyond the specified limit is now subject to taxation under the Income Tax Act. Implications for Employers: This clarification places the responsibility on employers to ensure compliance with tax regulations regarding employee ben
Read more

Summary Of The Key Proposed Changes In The Finance Bill 2024

Image
  Income Tax Act: • Introduction of Motor Vehicle Tax at 2.5% of the vehicle value payable upon insurance issuance. • Withholding tax on goods supplied to public entities at 3% for residents, 5% for non-residents. • Taxation of income from digital marketplaces/platforms at 20% for non-residents, 5% for residents. • Introduction of Significant Economic Presence Tax at 30% for non-residents. • Minimum top-up tax for resident entities in multinational groups. • Deductibility of SHIF, post-retirement medical funds, and the affordable housing contributions. • Investment deduction for spectrum license purchase at 10%. • An eco levy for manufacturers and importers will be introduced. • Imported motorcycles beyond a certain price will be taxed at 10% of value instead of a flat rate. • Taxation of interest income from infrastructure bonds for residents. Value-Added Tax Act: • VAT exemptions on bread will be removed. • Removal of VAT exemptions for financial services such as credit and debit car
Read more

Understanding Advance Tax: Essential Information for Vehicle Owners.

Image
  Welcome to the latest edition of the RWK & ASSOCIATES CPA(K) Newsletter. In this issue, we focus on Advance Tax , a critical requirement for all commercial and public service vehicle owners. Understanding how this tax operates and how to manage it effectively can save you time and avoid unnecessary complications. Advance Tax is a mandatory prepayment needed before a commercial or public service vehicle can be registered or licensed. The tax amount is determined by the vehicle's type and capacity. For example, vans, pick-ups, trucks, and similar vehicles incur a fee of Kshs. 2,500 per ton of load capacity or kshs 5000 whichever is higher. In contrast, saloons, station wagons, mini-buses, buses, and coaches are charged Kshs. 100 per passenger capacity per month or kshs 5000 annual amount whichever is higher. It is important to note that Advance Tax is not a final tax. Taxpayers must report this payment in their annual income tax returns and settle any additional taxes that
Read more