Kenya, June 6 -- National Treasury Cabinet Secretary John Mbadi said on Thursday that talks are happening to change the Affordable Housing Levy. This levy is a policy that aims to help fund Kenya's housing program, but it has caused a lot of debate.
Recently, the World Bank suggested in their Kenya Public Finance Review that low-income workers, those earning less than half of the average wage, should not have to pay this levy to help reduce their financial stress.
The Affordable Housing Levy takes 1.5% from the salaries of workers. There has been a lot of discussion about what this levy is for and what effect it has.
President William Ruto has called it a "contribution" instead of a tax, saying it helps guarantee that Kenyans can access affordable housing.
However, Housing Cabinet Secretary Alice Wahome stated that the levy is actually a tax, and paying it does not guarantee anyone a house. This has led to confusion and criticism from the public.
John Mbadi mentioned that discussions are ongoing to change the Affordable Housing Levy.
This is interesting because just last week, the World Bank proposed that low-income earners should be exempt from the levy.
The Kenya Kwanza government started this 1.5% monthly contribution to support its plan to build 200,000 housing units every year.
President Ruto said this levy will help address the shortage of two million houses in the country and provide a better living for Kenyans.
Every working Kenyan pays 1.5% of their salary towards this, and even those who do not earn a salary are required to pay the same amount.
Published by HT Digital Content Services with permission from Bana Kenya.