Ruto defends housing levy on workers, says it's part of savings
Business
By
Mike Kihaki and Wesley Koech
| May 12, 2023
President William Ruto has defended the three per cent deduction on employees pay for housing schemes, saying this contributes to individual savings towards owning decent houses.
He scoffed at politicians whom he said have blown the issue out of proportion to divert the real meaning of the contribution. He said the government during campaigns promised to bridge the current housing deficit, which stands at two million.
"I want to be clear here, this is not a tax but a collective contribution between the employee and the employer. This is not a new project, we were part of the plan as we campaigned last year to provide decent and affordable housing to our people," he said.
The President was presiding over the ground-breaking ceremony of Bellevue Park Residences-Affordable Housing project, Nairobi.
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Ruto said the housing scheme has been politicised and dubbed taxation, which is not the case.
"This is a situation where you contribute three per cent, as well as your employer, remits the same rate towards your contribution to the scheme," he said.
He said it is through collective responsibility that the less fortunate can live decently.
"You MPs and MCAs already have your mortgage. Why are you trying to deny the less fortunate their own houses? We must plan for the ordinary man," Ruto said.
He said the houses which will be constructed by LapFund are targeting 80 per cent of the middle-class market and the high-end population will go at Sh2.5 million.
However, Ruto said the Kenya Kwanza government in partnership with the LapFund will ensure millions of Kenyans living in informal settlements own houses despite their meagre pay.
"We want to ensure we have more homeowners than home renters. The government is going to turn what has been a dream to many into reality. 'Our aim is to empower these workers such that they will not only be homeowners but also attain the necessary skills to participate at a larger scale in future construction projects,'' Ruto said.
He said removing tax on construction materials will make possible standardisation of all products to be used.
He noted that the World Bank and the development partners have demonstrated a willingness to offer loans to those who will be interested in buying the units. Ruto said, so far 41 county governments have partnered with the national government to employ the housing scheme, saying so far, a total of 41,000 housing units have been launched.
"We have a pact with 41 counties, which have provided us with 4,000 acres of land to implement the affordable housing units," Ruto said.
The project will provide direct and indirect jobs to about 5,000 Kenyans. It will also provide business opportunities for all, especially the youth through the supply of materials.
Ruto said the government is working to capacitate and upskill the workers to better position them for future opportunities beyond this project.