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There is already too little left of taxpayers’ salary to deduct more money

By The Standard | Published Sun, August 26th 2018 at 00:00, Updated August 25th 2018 at 20:19 GMT +3

The National Assembly’s Finance Committee has given backing to one of President Uhuru Kenyatta’s Big Four plans by endorsing Treasury’s proposal to deduct a portion of Kenyans’ salaries to go towards building affordable houses through the National Housing Development Fund.

While the idea to construct 500,000 houses by 2022 is commendable, it is surprising that the MPs thought it wise to load the cost on the already overburdened taxpayer. They even went beyond the rate of 0.5 per cent of an employee’s pay that Treasury Cabinet Secretary Henry Rotich had proposed in his budget speech and increased it to 1.5 per cent in amendments to the Finance Bill. One would have expected that the committee would be fully aware of the heavy load that Kenyans are already carrying through myriad taxes on almost everything they use.

If they were in doubt, that same Bill that they amended has set out new levies that have been loaded on taxpayers including on foodstuff, fuel and other basic consumables. By raising the housing development levy to 1.5 per cent – no, even supporting it – the committee ignored pleas over the extra tax on workers and their employers, who have to contribute an equal share to the fund. The Kenya Federation of Employers and professional groups have pointed out that the levy will significantly increase companies’ payroll costs in an already strained market that is struggling to create jobs.

Questions have also been asked on the structure of the fund. While selling the idea of the housing fund in June, Treasury said the houses constructed through the kitty would be allocated through a lottery.

How fair is it that a worker who has contributed tens of thousands of shillings in a working lifetime will still not be guaranteed a roof over their head and will instead have to be picked through the toss of a coin or the roll of a lottery drum?

There is already too little left of an employee’s salary to again go back and deduct money whose benefit to the contributor is not yet clear. We urge Parliament, once it gets to discuss the amendments, to search its soul and spare the taxpayer the added pain. 

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