Treasury Cabinet Secretary Njunguna Ndung’u revealed new measures during a budget reading session on Thursday, June 13, 2024, and in his speech included a proposal which will see some sort of savings on their pay slips.
Ndungu said the issue of double taxation affecting salaried individuals has raised concerns among taxpayers, and said that both the Housing Levy and the Pay As You Earn (PAYE) are currently imposed on the same gross salary base, leading to an unfair taxation burden.
To remedy this situation, Ndung’u proposed amendments to make the Housing Levy a deductible tax.
As a result, the new adjustments will ensure that PAYE and the Housing Levy are taxed on different gross income levels, thereby reducing the overall tax liability for Kenyan workers.
“The Affordable Housing Levy and PAYE are calculated from the same base, leading to double taxation.
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To address this, I propose to make the Housing Levy a deductible expense,” said Ndungu.
Tax Saving For Kenyans
What this means is that there will be “a tax saving for Kenyans, therefore affording them more money in their pockets.”
The Housing Levy, which was initially introduced in the Finance Act 2023, is currently set at a rate of 1.5 percent of the gross salary and income.
The move to make this levy a deductible expense signifies a significant step towards reducing the tax burden on salaried individuals and ensuring that they have more disposable income to meet their financial needs.
