Kenya’s Affordable Housing Levy Raises Ksh73.2B, Beating Target by Ksh10B

Nairobi, Kenya — 2025-09-05 18:00 EAT. Kenya Revenue Authority (KRA) has confirmed collecting Ksh73.2 billion under the Affordable Housing Levy in FY 2024/2025, exceeding its target by Ksh10 billion amid strong compliance.

The Latest

KRA’s new report shows workers and employers remitted more than expected despite early opposition to the 1.5% salary deduction. About half the funds remain invested in Treasury instruments pending housing rollout. Status: confirmed.

Context in Brief

The levy began in March 2024 after political and court battles. Critics feared wage erosion and misuse of funds, but compliance rates have climbed, giving the government fiscal room for housing projects and infrastructure.

Law, Policy, and Process

• Statutes: Housing Levy anchored in the Finance Act 2024; deductions via the Income Tax Act mechanisms.

• Remittance rules: 1.5% employee + 1.5% employer; due by 9th working day monthly.

• Oversight: Auditor-General, Parliament’s Housing Committee to review expenditures.

Voices and Stakeholders

• Government: “We are turning the housing levy into tangible benefits,” President William Ruto, Homa Bay, 2025-09-03.

• Opposition: Calls for transparent fund management persist, led by MPs demanding quarterly disclosures.

• Civil Society: Watchdog groups warn against fund diversion.

Evidence & Data

• Collections: Ksh73.2B vs Ksh63.2B target.

• Investments: ~50% in Treasury bills/bonds.

• Projects: Markets, hostels, housing units in pipeline.

Risks and Implications

• Governance: High scrutiny on spending may delay project rollouts.

• Economy: Surplus investments add short-term returns but defer housing impact.

• Politics: Levy acceptance tied to visible housing results.

What We Don’t Know

• Timelines for first housing unit completions.

• Full project list using FY 2024/2025 funds.

• Whether levy rates remain fixed long-term.

Timeline

• 2024-03: Levy implementation.

• 2025-09-05: KRA publishes collection figures.

• 2025-09-10: Employer penalty deadline for arrears.

What to Watch

• Next KRA collections report in Q4 2025.

• Groundbreaking of first levy-funded housing projects.

• Parliamentary hearings on fund accountability.