Tuesday, May 30, 2023 – As more people continue to reject President William Ruto’s mandatory housing scheme, Housing Principal Secretary Charles Hinga may have made it worse.
This is after he revealed that Kenyans would be taxed when they opt to withdraw their contribution from the Housing Fund after seven years contrary to earlier promise that the housing levy is not a tax but a saving.
Speaking during an interview, PS Hinga explained that the withdrawal would be taxed in the end since the initial 3% contribution will not be taxed during the salary deduction stage.
He further noted that the tax was not a foreign idea, citing taxation imposed on withdrawals from pensions.
“The money is a saving and was not taxed initially. If you could have earned the money, you would have paid tax. That means for the seven years, you did not pay the tax.”
“This money is aimed at addressing the issue of housing and unemployment,” he expounded.
On whether Kenyans would also get the other 3% topped up by their employers, Hinga revealed that the employers’ contributions would still stay in the fund for a longer period.
“In the draft regulations, it stipulates that Kenyans will get the 3% they contribute. However, the employers pay for the other 3%, which will remain in the Housing Fund for 14 years,” Hinga noted.
He maintained that the Housing Fund was a saving and not a tax, adding that the funds would help the government address the housing shortage in the country.
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