Government plan to deduct 1.5 per cent from employees' earnings to finance low-cost homes faces headwinds.
The Employment and Labour Relations Court has suspended the 1.5 per cent levy that was to be deducted from workers' monthly pay to finance a new low-cost housing fund.
Justice Hellen Wasilwa suspended the charge following an application filed by by the Central Organization of Trade Unions (COTU) which is opposed to the levy on grounds that no public participation has taken place and that transparency in its implementation is not guaranteed.
The deduction is contained in the Finance Act, 2018 which was set to take effect on January 1, 2019 despite opposition from unions and employers.
“That interim order suspending the of section 31 A of the employment Act, 2007 as amended by section 86 of the Finance Act, 2018 be and is hereby issued, pending inter parties hearing and determination of the application on January 21, 2019,” ordered Justice Wasilwa.
Employers and workers' unions have been against the decision by Treasury to to have their members make monthly contributions to the National Housing Development Fund, a plan pushed through Parliament in September.
It required a deduction of 1.5 per cent from an employee’s earnings, with the employer matching that amount.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
