New bill proposes penalties for anyone found misappropriating funds from the Housing Levy
The recently introduced Affordable Housing Bill 2023, presented to parliament, suggests imposing sanctions on individuals discovered diverting funds from the Housing Levy.
According to the provisions of this new bill, individuals found culpable of misappropriating the funds could be subject to a substantial fine of KSh 10 million, a maximum imprisonment of five years, or a combination of both penalties.
This measure represents a significant departure from previous regulations, indicating a strong commitment to taking a firm stance against the mishandling of funds designated for housing development.
The government aims to reassure Kenyans that the funds will be utilized for their intended purposes.
The necessity for the Affordable Housing Bill 2023 arose following a recent court ruling that declared the previous levy, established under the Finance Act 2023, unconstitutional.
The legislation additionally imposes more severe consequences for non-compliance with the levy payment.
Employers who neglect to remit the Housing Levy may be subject to a penalty of 3.0% of the unpaid amount for each month they failed to remit the levy.
This marks a noteworthy escalation from the previously established penalty of 2.0% under the Finance Act 2023.
The court emphasized concerns about the collection authority, pointing out discrepancies between the First Schedule of the KRA Act and the mandate entrusted to the Treasury, rather than the Lands Ministry.
It was the Lands Ministry that had authorized the Kenya Revenue Authority (KRA) to collect the levy.
Section 7 of the Affordable Housing Bill 2023 seeks to address these discrepancies and establish a transparent framework for levy collection, with a specific emphasis on clarifying the role of the Treasury in authorizing the Kenya Revenue Authority (KRA) for such collections.
