Workers in Kenya have been handed a blow after the Kenya Revenue Authority announced that the deduction on the housing levy will be on gross monthly salary and not basic pay.
KRA in a notice on Tuesday said all workers will pay Housing Levy based on their gross salary.
"Gross monthly salary constitutes basic monthly salary and regular cash allowances. This includes housing, travel or committer, car allowances and such cash payments and would exclude those not paid regularly such as leave allowance, bonus, gratuity, pension severance pay or any other terminal dues and benefits," KRA said in a statement.
KRA said this applies to all employees regardless of their type of contract of service.
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"Taxpayers paying housing levy under Section 31B of the Employment Act are not eligible for affordable housing Relief under Section 30A of the Income Tax Act Cap 470."
Initially, Kenyan workers were required to pay 1.5 percent of the basic pay.
This increment means Kenyans will pay more for the Housing Levy contrary to what was announced earlier.
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