Ruto Surrenders To Uproar On Housing Fund, To Consider Changes

Housing and Urban Development Principal Secretary (PS) Charles Hinga on Tuesday, June 6 revealed that the government was willing to make adjustments to the proposed National Housing Levy, as outlined in the Finance Bill.

While appearing before the National Assembly's Finance Committee, the PS noted that the adjustments would be made to reflect the various views of stakeholders.

Hinga asked the committee to utilise its powers and make the necessary changes to the Bill coming after two weeks of public participation whereby Kenyans gave their views on the Finance Bill.

The PS maintained that the levy will be beneficial to employee contributors as the fund will not be subjected to tax on maturity, contrary to reports.

The PS, whose office the bulk of the housing project will be implemented, was challenged to explain the proposed workings of the National Housing Development Fund and struggled to elaborate on the 3 per cent contributions.

"This is a tax, you're forcing even the poorest Kenyans to pay tax to build houses for those in Nairobi,” Turkana South MP John Ariko, who sits on the Finance Committee, pointed an accusing finger at Hinga.

"If you look at the principle of paying taxes, there is not necessarily a direct relationship between what you pay and what you get but this Housing Levy confers you a direct benefit. If you want to argue from a technical perspective; is it a tax because it takes a mandatory shape," Hinga responded.

The housing levy has witnessed sharp criticism over what has been termed as discriminatory policies that appear to satisfy the rich more than the poor, the lack of clarity over its governance structure and the safety of the monies collected as well as the criteria that will be used to determine who qualifies to benefit from the affordable houses the government intends to build using the fund.

While the government previously maintained that the Finance Bill would be approved without changes, the PS expressed openness to make a few alterations.

"We may disagree on the approach and there are contentious issues in the Bill that need to be cured and I hope this Committee will do so.

"We can correct it but let's not lose focus of why we are doing this. We are doing this because we have come to a point of reckoning," said Hinga.

He urged the committee nonetheless to defend the Fund contained in the Finance Bill and make the changes before the Second Reading, without dismissing the levy.

According to him, if a contributor is fired, he or she would access the funds after retirement, thus his emphasis on the Fund being a levy and not a tax, as pushed by President William Ruto.

Hinga explained that among the changes he was pushing for had included all Kenyans being eligible for contribution and receiving houses, clarifying claims that only employed Kenyans would contribute to the Fund.

"If you are a parent but you already have a home, you may want to contribute for the sake of your child," he urged.