Kuppet rejects proposed 3 per cent housing levy deduction

KUPPET Deputy Secretary General Moses Nthurima addressing the press over the government's proposal to deduct civil servants' 3 per cent salary for housing on April 26, 2023. [Silas Otieno, Standard]

The Kenya Union of Post Primary Education Teachers (Kuppet) has rejected the proposed 3 per cent housing levy on the salaries of civil servants.

The union said Kenyans are already experiencing a high cost of living citing increasing high taxes without any salary increments.

Deputy Secretary General, Kuppet Moses Nthurima said teachers' salaries have not been increased for over five years.

According to Nthurima, the housing fund would worsen the situation noting that National Health Insurance Fund (NHIF) was increased to 3 per cent, and another 7.5 per cent levy was introduced for retirement contributions under the Public Service Superannuation Scheme (PSSS)

"We are paying high taxes under Pay AS You Earn (PAYE), there is 16 per cent VAT and inflation to also high, the teachers are burdened,'' said Nthurima.

"We are asking the government to shelf this scheme because we will fight it. We are truly shocked that the government can propose a new tax at a time when teachers are expecting a salary increment,'' added Nthurima.

Nthurima was speaking yesterday when he addressed the press at the union's office in Nairobi.

He said the last time teachers got a pay rise was in 2016 under the 2016-2021 Collective Bargaining Agreement (CBA) but the benefits have been eroded by the 7.5 per cent pension deductions, higher NHIF taxes and hyperinflation.

The union also said the situation has been made worse by the endemic stagnation in service with over 62,000 teachers remaining in their job groups for more than five years and some 10 years and they will not allow any more taxation before a significant pay increase addressing the injustices.

On Sunday, President William Ruto announced a government plan that will require all civil servants to contribute 3 per cent of their monthly salaries to a housing fund for the new affordable housing project.

The President while attending church in Donholm, Nairobi, said deductions will first be effected on the civil servant's salaries.

He said for every employee who saves 3 per cent with the Housing Fund, the law will require their employer to also contribute another 3 per cent.

The union blamed the government for not engaging civil servants; especially teachers and their employer in dialogue on the proposed levy as per the basic tenets of the labour relations in Kenya.

''Dialogue is particularly vital in the implementation of policies that affect workers' earnings and benefits. The proposed tax must be taken through a process of public participation including teachers themselves and not just the government wake up one day and announce such taxes,'' he said.

It is not the first time the government is trying to introduce a housing levy for civil servants and all Kenyans.

In the last regime, there were plans to introduce the same at 1.5 per cent but it was rejected by High Court after the Central Organization of Trade Union (COTU), Trade Union Congress of Kenya, Consumers Federation of Kenya (COFEK) and Federation of Kenyan Employers (FKE) among organizations filed petitions opposing the levy.

According to the union, the PSSS Act allows teachers can access up to 40 per cent of their pension contributions to build houses, hence they do not need a new tax for housing development houses.

It also expressed concern that the government has delayed remitting 15 per cent of contributions to PSSS, thereby affecting the scheme's investment earnings.

''As of today, the government is eight months in arrears on its own contributions and several months late in remitting the 7.5 percent deducted from teachers,'' said Nthurima.