Relief as Treasury makes slight changes on Housing Levy Deductions Adjustments
Housing Levy Deductions Adjustments, The Honourable Njunguna Ndung’u has announced steps to address the issue of double taxation on housing Levy affecting employed Kenyans,this happened during his presentation of the 2024/2025 Budget on Thursday, June 13.
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According to , he Ndung’u acknowledged the double taxation challenge arising from the Housing Levy and Pay As You Earn (PAYE) being levied on the same gross salary.
He instead proposed changes to allow the Housing Levy to be deducted as a tax.
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With this proposed adjustment, the PAYE and Housing deductions would be applied to different levels of gross income, thus easing the burden on taxpayers.
For example,at the moment, both levies are calculated based on the same gross salary, however with the new proposal, PAYE would be calculated on the gross income minus the Housing deductions.
Ultimately, the above changes would result in reduced taxation, putting more money in the pockets of Kenyans.
Housing deductions which was introduced in the Finance Act 2023, stands at a rate of 1.5 percent of gross salary and income.
Despite these adjustments, most Kenyans should anticipate further deductions due to the impending launch of the Social Health Insurance Fund (SHIF).
According to the ministry of health, Registration for SHIF, beginning on June 21 and it will require Kenyans to contribute 2.75 percent of their gross salaries for coverage under the new health insurance scheme
The deductions above are starting from July 1, 2024.
