As the housing levy remains suspended, employees were expected to pay 1.5 per cent from their monthly income to contribute to the new housing fund after President Uhuru Kenyatta restored the levy that had been rejected by the Members of Parliament.
The president’s proposal will deduct a monthly amount of up to Sh5,000 for high-income earners.
Gatundu South member of parliament Moses Kuria has revealed why the levy matters to the government;
In his social media post he wrote:
I have listened carefully to both sides of the debate on the Housing Levy. The Government is looking up to the Levy to unlock long term access to local and international capital markets for the Housing Development Fund, which in turn will give confidence to local and international investors who have pledged to pump into the economy Ksh 2.6 Trillion of direct investment over the next 5 years. Given our economy is in deep trouble with near zero liquidity, government crowding out private sector from the credit market, the chocking pending bills that are killing the private sector, unhelpful Central Bank rules that have forced Kenyans to store Ksh 300 Billion under their mattresses, a complicated VAT refunds regime, pro-Ugandan and pro-Chinese trade policies and a generally hostile operating environment for small traders and SME’s, injection of Ksh 2.6 Trillion into the economy is to me more of an economic stimulus issue than a housing issue. As such I would really love to see this project succeed if only to inject Ksh 2.6 Trillion into the economy and create millions of direct and indirect jobs. On the other hand, I hear loud and clear that the workers of this country do not want to bear the burden of making this project work alone. They say they are very few of them in formal employment to bear the burden of the vast majority who are not formally employed. I will be reaching out to the relevant stakeholders with the proposal that as a parliament we make an irrevocable commitment to vote Ksh 20 Billion from the Exchequer into the Housing Development Fund every year for the next 10 years. The Fund will then issue 25 year capital market instruments to capitalize the Fund with around Ksh 500 Billion. This will, in turn, see private investors release the Ksh 2.6 Trillion over the next 5 years and thus stimulate the economy. This way we will not need to Levy the small minority of Kenyans informal employment, all Kenyans will pay for this noble project and we will stimulate the economy and create millions of jobs