Whats this forced housing contribution?
SEE ALSO :Diversify exports, Kenyans urgedFor instance, The Kenya Economic Survey 2018 indicates that Pay as You Earn (PAYE), which is tax on employment income, is the second highest source of government revenue after Value Added Tax (VAT), contributing over KShs 300 billion to the exchequer annually. According to the survey, only about six percent of the population is in wage employment which translates that employees are contributing a disproportionate amount of the Government revenue. In addition to PAYE, the Kenya Revenue Authority (KRA) seeks to raise more revenue from employees through VAT, Import Duty and Excise Duty! Moreover, with the institutionalized corruption, the public is worry of Government initiatives where mega financing is involved as funds disappear without a trace. For instance, public contributory schemes like the National Health Insurance Fund (NHIF) and National Social Security Fund (NSSF) are currently engulfed in crises over fraud. What will cushion the housing fund from the looters?
SEE ALSO :Sh720m given for water, roadsThere are also arguments from other quarters that although the constitution provides for access to proper housing, housing is majorly a private matter. Currently, many employees invest on private houses through various Saccos which they save for. The Government will then be hard pressed to explain why employees should be ‘compelled’ to build houses for others. It can be agreed that to alleviate the heavy burden on employees, the Government should consider practical ways of easing the tax burden including widening the tax bands which are extremely narrow. The Government can also consider roping in the informal economy in the tax bracket – for instance, the presumptive tax under the Finance Act 2018 to be paid when obtaining business permits.
SEE ALSO :Concern over low uptake of scienceThe writer is an Advocate of the High Court of Kenya.
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