Ruto Explains Why He Is Cutting 3% Of Kenyans' Salaries

President William Ruto, on Thursday, May 11 argued that the proposal for employees to contribute three per cent of their monthly basic salary to the affordable housing plan was for low-income earners to realise their dream of owning homes.

Speaking at the groundbreaking of the Lapfund Bellevue Park Residence Project in Nairobi, the President affirmed that the affordable housing plan was one of the critical campaign promises he had to fulfil.

He further exposed politicians who were against the proposed contributions as depicted in the Finance Bill 2023 yet they campaigned alongside him and promised Kenyans affordable housing, through the 3 per cent contributions.

"The leaders with me during campaigns heard me saying there was a housing plan. Why would they turn their backs now?

"We went everywhere during campaigns and told Kenyans that there was a housing plan that would give people opportunities for employment and allow them to own homes," Ruto stated. 

He further revealed that the politicians who were complaining about the mandatory deductions were homeowners themselves while others were dealing with hefty mortgages.

"I know that most of you already have mortgages you can pay up to Ksh50,000 or Ksh20,000.

"Why would you not want the rest of Kenyans not to own homes? Allow the hustlers also to own homes," he stated.

The Head of State, in his attempts to allay fears across the country, argued that the three per cent deductions were not a tax but money he claimed belonged to Kenyans.

He added that other than the 3 per cent deductions from employees' salaries, the 3 per cent would also be reduced from the contributions made by employers.

"In the housing fund plan, employees are to remit 3 per cent every month, and the employers will give 3 per cent. The six per cent will be the employees' wealth. 

"That money is yours and not tax, all that money belongs to the people. This is a programme that we cannot fail to do because it provided jobs for the millions of young people leaving our learning institutions," he added.

President Ruto noted that the government had plans to engage investors to ensure that the number of affordable housing units put up every year was increased by four times in the affordable housing plan.

“We will increase the number of housing units from 50,000 to 200,000 every year and make the proportion of affordable housing from 1 per cent to 50 per cent yearly.

"It has not been possible for a Kenyan who can pay the mortgage to find a house to buy and call home, and that is why we have the Affordable Housing Plan," stated Ruto. 

The Finance Bill had proposed amendments to the amendment of the Employment Act of 2007 to compel employers to contribute to the National Housing Development Fund for each of their employees.