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.

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