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OPINION: Uhuru should address these issues before we pay housing levy
By Honesty Oimbo | Updated Apr 25, 2019 at 09:40 EAT
opinion-uhuru-should-address-these-issues-before-we-pay-housing-levy
Photo (Courtesy)
SUMMARY

The housing levy should not be used to benefit people who live in Nairobi alone

A tired worker toiling in the harsh backwoods of a remote county will feel unfairly taxed if their money is used to construct houses in Nairobi County only

Kenyans are bitter that the housing levy of 1.5% of their basic salary is about to be imposed on them, against their free will.

The bitterness that is wrenching the hearts of hardworking Kenyans is founded on solid reasons that President Uhuru Kenyatta and his government should not ignore.

The following are sincere fears that the government should fully address before forcing Kenyans to pay housing levy.

One, a tired worker toiling in the harsh backwoods of a remote county will feel unfairly taxed if their money is used to construct houses in Nairobi County only.


The housing levy, in other words, should not be used to benefit people who live in Nairobi alone. The resource should be fairly distributed across the 47 counties.

Secondly, as it is, the housing levy is not progressive in terms of contribution according to earner’s income, whichever way one may look at it.

It will be grossly unfair – almost a breach of the basic principles of taxation – for the government to impose the same percentage of levy on low-income earners just like that of higher income earners.


(Housing PS: Charles Hinga)

If people in the high-income brackets pay 1.5%, then – for equitability purposes – a low-income earner should pay less than 1.5%.

Therefore, if the President wants Kenyans to consider embracing the proposed housing levy wholeheartedly, his government should try to make the tax equitable across the income brackets.

Low-income earners should not pay the same percentage of housing levy like higher income earners. This is common logic.

The third reason that the government should pay attention to is that Kenyans are not willing to be forced to pay the housing tax because the money is not simply available in the hands of the poor hardworking Kenyans.

One of the principles of taxation is that a taxpayer should only pay tax when the money is available. As it is, Kenyans are undergoing hard economic and testing times and the little they earn is not enough to be subjected to multiple taxation, apart from the compulsory PAYE.

Lastly, the government should assure the citizens that the houses will be built by Kenyans and not the Chinese companies. The housing projects should be able to benefit the unemployed youth of Kenya and not those from other countries.

With those few pieces of advice, I know the advisers of the President of Kenya will brief him about these as these are real fears on housing levy from real Kenyans.

 

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