Jubilee presidential flagbearer Fred Matiang'i wants the housing levy abolished. In an NTV interview, he said the tax adds to the financial burden on Kenyans as the cost of living rises, The Star reported. He said scrapping it would ease concerns over excessive taxation and leave households with more money.
"Quite frankly, in my view, we should scrap this housing levy because it is very burdensome when you look at it," Matiang'i said. The former Interior Cabinet Secretary also proposed raising the non-taxable income threshold to Sh35,000. He said this would ease pressure on low- and middle-income earners. For ordinary workers, the plan would mean bigger take-home pay.
Matiang'i argued that putting more money in workers' pockets would boost household spending. He said this could gradually support economic recovery. He named wastage of public resources, excessive bureaucracy and corruption as the country's biggest problems. He said corruption had reached "unprecedented levels" and that some people had not grasped how serious the situation is.
He called for "courageous, radical and decisive" action. He proposed reviewing the national budget to find areas where spending could be cut. The money saved, he said, should go to essential services and development. He also listed reforms in critical sectors as urgent, along with fighting corruption and fixing security and bureaucracy.
President William Ruto has consistently defended the levy, according to The Star. He has criticised politicians who oppose it. He has also challenged them to say how else they would create jobs for the young people working in the affordable housing programme.
Ruto says the contributions are needed to fund housing development and improve living conditions for families in informal settlements. The contributions are provided for under the Affordable Housing Act, 2024. Employees pay 1.5 per cent of their gross monthly salary, and employers pay a matching amount.
The Star noted that political leaders are divided over the levy's economic impact and its role in funding affordable housing. The paper said the levy is likely to feature prominently in the 2027 presidential campaigns.