The government has said that the proposed housing fund contribution is not a tax but a saving.
This according to Housing Principal Secretary Charles Hinga, “the fund confers a direct right to either get an affordable unit or, after seven years if one do not want it, we give you back your money plus your return.”
PS Hinga explained why the controversial contribution to the proposed housing levy is mandatory during a function at State House Wednesday.
He said the housing fund has two schemes; mandatory and voluntary adding that people in the informal sector are allowed to save through the voluntary scheme.
He said with the contribution, the government can confidently get investors for the housing plan, with the assurance that they will be able to pay them after construction is done.
The PS revealed that before coming up with the plan, they were benchmarked in various countries which have succeeded in the plan.
The proposed levy has been met with fierce criticism with a section of leaders and Kenyans at large demanding that contributions be made voluntarily.
The Finance Bill 2023 is currently in the National Assembly.
“The housing levy should be driven by law and not voluntary because if it is driven by law, we can call investors because there’s an assurance of collecting money even after three years, so long as the law is there.” Said PS Hinga.
While demonstrating optimism PS Hinga told parents who are complaining about the housing levy that: “by the time your child is 18, they can have a unit.”
In his address he said the housing levy contribution will provide Kenyans with a significant return compared to fixed deposit accounts.
“Let us disagree where we have to disagree, but let’s not beat this thing (the Housing Fund) so hard that we want it to fail. If it fails, we will not have sorted out the economics of this country or the urbanization issue.” He explained.
