Housing and Urban Development Principal Secretary Charles Hinga has come out to explain why the contentious housing levy contribution in the Finance Bill, 2023, should be made mandatory.
Hinga told journalists on Wednesday at State House in Nairobi that the levy will reassure investors that the government intends to build houses.
“Some of you are asking why can’t we make this voluntary. But when it is driven by law, if I’m going to get a billion a month, it means I can go out there and call investors and tell them that as long as the law is there, I will be collecting money after three years,” he said.
While comparing it to Kenyans’ fuel levy, the PS stated that the government could not have built roads if it did not have a monthly cash flow certainty to present to road construction companies.
“We went to the markets and told them to give us a lot of money today we build roads and in the next 15 years we will be paying that levy and we will be able to pay you out. If we didn’t have that, they would tell us we can’t afford that,” he explained.
“The highest-earning Kenyans will only pay Ksh.2,500, the majority will pay Ksh.1,000 and below. So when we put this all together as a country, we will be able to go out to the market and tell investors that the government is providing land at no cost for Kenyans to own homes, build houses in mass, give me the keys and go. If I don’t have the housing fund, they will refuse to build.”
PS Hinga stated that Kenya benchmarked with Singapore, Mexico, Brazil, Nigeria, and China before shelving the proposal.
“Sometimes to know how not to do it, and they said let us save together; they told their employer save this and I will save that,” said the PS.
A group of Kenyans has been advocating for the housing levy to be made voluntary.
The proposal calls for employees to contribute 3% of their monthly salaries to President William Ruto’s ambitious plan to provide Kenyans with affordable housing.
