KRA Issues Update On Collection Of Affordable Housing Levy

The Kenya Revenue Authority (KRA) has directed all employers to deduct the 1.5 percent Affordable Housing Levy (AHL) from employees.

In a notice on Thursday, March 21, KRA Commissioner General Humphrey Wattanga said the deductions take effect from March 19, 2024.

“With effect from 19th March 2024, all Employers are required to deduct the AHL from the employee's gross salary and remit together with the employer's contribution as follows: One point five per centum (1.5%) of the employee's gross monthly salary by the employee and One point five per centum (1.5%) of the employee's monthly gross salary by the employer,” read the notice in part.

Wattanga noted that Kenyans who receive income or whose income is accrued in Kenya are required to remit 1.5% of their gross income as the Affordable Housing Levy to the authority.

He also noted that the due date for remittance of the Housing Levy is the 9th working day after the end of the month. 

“KRA clarifies that all employers are required to declare the AHL under sheet "M" of the PAYE return on itax; generate a payment slip under the tax head "agency revenue" and tax sub-head "Housing Levy"; and make payments at KRA agent banks or mobile money through eCitizen Paybill Number. 222 222 or by dialling *222#,” Wattanga added.

The KRA Commissioner General further warned that any person who fails to comply with the law shall be liable to payment of a penalty equivalent to 3 percent of the unpaid funds for every month if the same remains unpaid.

The notice comes days after President Willian Ruto signed the Affordable Housing Bill into law at an event in State House, Nairobi.

The Act establishes a Fund, into which the levy is payable and the Fund shall be managed by the Affordable Housing Board which shall be responsible for the management of monies raised through the Housing Levy. KRA is designated as the collector of the levy.