EDITORIAL: Housing levy good idea, but bad timing

President Uhuru Kenyatta
President Uhuru Kenyatta. FILE PHOTO | NMG 

The government has issued a notice to employers that they must deduct 1.5 percent of workers’ salary and counter-fund the same amount for the Housing Fund. That on its own is not surprising as everyone has been made aware of the levy for several months now. As well, no one questions the need for affordable mass housing given that majority of townspeople live in suboptimal conditions that require to be urgently addressed.

On top, the economy can do with a major boost that no other industry can manage better than construction. That said, there are issues that make such a programme a non-starter at this particular time, begging the question why the promoters of the scheme are in such a hurry.

One, as the Federation of Kenya Employees (FKE) pointed out Wednesday, there is still a stay order against the venture and the court is yet to conclusively pronounce itself on the matter. Employers went to court seeking to stop the newest of a raft of taxes slapped on everyone by the government.

Second, there is little buy-in on the project even from other key stakeholders. While some may dismiss opposition by teachers’ and workers’ unions as routine, the fact that the Constitution calls for wide consultations means the unionists have their point and must be listened to before the programme is given the green light.

Third, and very important, Kenyans have a good reason to be cautious, if not suspicious, of any scheme by the current administration. Comparable funds — the National Social Security Fund and the National Hospital Insurance Fund — are cautionary tales on why to be fearful. Routinely, they are turned into slush funds for politicians and thieving employees, many of whom are in court for suspected larceny. In fact, their honchos are routinely sacked before they end their terms.


This especially comes at a time when billions have been looted to the point of numbing the sensitivity of citizens to corruption and wanton theft. Moreover, the housing scheme comes as a burden to employers struggling to stay afloat amidst poor credit flow following the rate caps, poor economic conditions and piling taxes.

Indeed, Kenyans need a housing boost. However, it is time the political leadership took a deep breath and admitted the timing is wrong and the first logical step should be to clean up the government and its finances before slapping more taxes on overburdened citizens.