In signing into law a Bill that offers home buyers under his affordable housing scheme a 15 per cent tax relief on gross incomes, President Uhuru Kenyatta showed he is prepared to go full steam ahead with the plan.
The 15 per cent tax relief is the latest plank on the plan that has seen the Treasury set up the Kenya Mortgage Refinancing Company to offer cheap home loans to banks and allocate Sh18.4 billion in this financial year’s budget to one of the major legacy projects.
Tax incentives, including stamp duty exemptions for first time buyers, will hopefully help win over the workers’ unions and employers that have expressed reservations about the demand that they contribute to the proposed National Housing Development Fund through monthly deductions.
However, there is still need to guard against abuse of the tax relief package and possible revenue leakages by issuing clear guidelines on who qualifies or the housing price threshold.
There are high chances that even individuals or groups who don’t exactly need social housing will seek to exploit any loopholes to benefit from the generous tax relief on offer.
Given the burden the taxpayer is expected to shoulder from the affordable housing plan, it would be unfortunate if the wrong people were to benefit.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
