Divided opinions emerge over proposed Housing Fund

PS for State Department for Housing and Urban Development Charles Hinga at the Senate chambers, Parliament. [Elvis Ogina, Standard]

The inclusion of the Housing Fund levy on the proposed Finance Bill, 2023 has sparked a heated debate, with Kenyans expressing differing opinions.

Amidst the ongoing discussions, the populace is left wondering whether the elected officials have the best interest of citizens at heart.

The Kenya Kwanza government insists that the fund is not a tax, but rather a monthly contribution aimed at improving housing conditions in the country.

President William Ruto’s administration has argued that the fund will not only lead to the creation of job opportunities in various industries but also benefit manual laborers.

However, the Opposition views the government's stance as an attempt to mint money from Kenyans forcibly, effectively turning it into a tax.

The disagreement has prompted politicians to publicly align themselves with either side of the argument and rally support from their constituents accordingly.

The faction opposing the introduction of the fund asserts that the government should not burden Kenyans with additional taxes when many are already grappling with financial difficulties. 

Nairobi Senator Edwin Sifuna speaking during a recent interview on Citizen TV stressed the need for the government to address the income disparities among Kenyans before imposing new taxes.

"No one in Kenya would not enjoy a good house, but your economic status determines how you live. Put money in people’s pockets first. Listen to the voices of Kenyans. You have not grown the income of the people," stated Sifuna.

According to the senator, by mandating employers to contribute 3 percent of their employees' salaries to the housing fund, the government is not creating job opportunities but rather increasing the cost of doing business.

Busia Senator Okiya Omtatah in a previous address also revealed that he had already prepared a petition against the Finance Bill and was fully prepared to lodge it.

"I have thoroughly examined the Bill, and it contains both good and bad provisions. Do not be misled into believing that everything in the bill is positive. Most of the negative aspects violate the Constitution, and we must abide by the law. I am ready to return to court and oppose the Bill," said Omtatah during a church service in Busia.

Githunguri MP Gathoni wa Muchomba has termed the housing fund proposal as both punitive and oppressive to Kenyans.

"The Bill is punitive to the same hustlers who gave us the mandate to represent them in government," said wa Muchomba, highlighting the concerns of those opposed to the fund.

However, Trade Cabinet Secretary Moses Kuria offered a contrasting perspective, pointing out that 30,000 Kenyans had already been voluntarily contributing to the Housing Fund, which has resulted in job creation and attracted foreign investors. Kuria emphasised that the benefits of the fund far outweighed any potential harm.

"Did you know that 30,000 Kenyans have already been contributing to the Housing Fund? They have raised Sh1.8 billion already. Each house creates ten jobs. That's 180,000 jobs right there, all stemming from a pool of 30,000 voluntary contributors. Now we have three million salaried workers in Kenya. By the same rule, that's 18 million jobs," tweeted Kuria on May 28.

In a recent interview, Housing Principal Secretary (PS) Charles Hinga reassured Kenyans that the government is actively working to revolutionise the housing sector in the country.

Speaking at State House in Nairobi on Wednesday, May 24, Hinga addressed the myths and misconceptions surrounding the proposed housing levy, which is outlined in the Finance Bill, 2023 currently before the National Assembly.

He explained that the government requires these contributions to have the means to compensate investors upon the completion of construction.

"This enables our nation to confidently approach the market and entice investors, encouraging them to bring forth their financial resources. Through this collaborative endeavor, we can successfully construct housing units on a large scale. Upon completion, the keys will be handed over, payment will be made, and the investors can move forward with their endeavours,” the PS said.

Hinga clarified that the decision was made with the intention of addressing the persistent issue of the housing problem, which has also led to an increase in informal settlements, currently numbering 1,400 and continuing to grow.