What you need to know:
- Too much talk about taxation is giving Kenyans sleepless nights and leading to a pandemic of depression.
- Given the level of corruption in Kenya, paying the government for housing in advance is no guarantee that you will get a house.
I support any government project meant to alleviate hardship, especially in low-income areas. However, the Housing Fund is one I am not sure is needed now or a priority for a country grappling with high poverty and unemployment rates. It has, rightly, roused suspicion.
The timing is also off, coming at a time when many Kenyans are struggling financially due to global economic challenges. Increasingly high cost of living has squeezed many people, salaried or not, but especially the poor. It sounds insensitive to talk to people unsure of their next meal about a housing levy.
The second issue is corruption. Ordinary Kenyans have borne the brunt of corruption for decades and any government policy asking for money for vague projects would easily be likened to all the others that came and went in a huff, as looming embezzlement. You cannot blame Kenyans for thinking that this is just another dubious scheme mooted to enrich some officials. Once beaten, twice shy.
The third issue is discrimination of the rural folk. The scheme appears to benefit mainly urban dwellers. I won’t be surprised if even the nomads, who don’t need sedentary living, end up paying to ‘house’ people in the cities. Expecting only the salaried to be taxed and benefit from housing is inequitable. And how would the salaried rich with no housing needs benefit?.
A similar scheme that was started by a former Mombasa governor in Buxton turned out to be just another scam to defraud longstanding residents. With such cases, it is only reasonable for Kenyans to think twice before parting with money for dubious government projects.
The housing plan is proving to be a hard sell but intimidation won’t help. The rumbling speech by a copiously sweating Housing permanent secretary attempting to convince Kenyans to buy into the scheme was unconvincing. Saying later it isn’t a tax but savings doubles the doubt.
The tendency to reinvent the wheel seems to be the desire of political parties that come to power. UDA hasn’t wasted time and, within the first year, have combined the housing tax with a Huduma Namba look-alike. Have we not been here before, only four years ago, and spent billions on ‘unneeded’ cards? Reconfiguration of Huduma ID or introducing a ‘new’ digital identity system reeks of corruption.
For a country that claims to be broke, it sure has its weird way of prioritising projects. Are housing tax and another digital ID necessities in this economic climate?
Governance is not about creating ‘eating’ opportunities but to govern—and that means focusing on citizens’ priority needs, such as better healthcare, schools, clean drinking water, creation of employment, fighting poverty, ending insecurity and attracting investments. It is crucial to reduce government expenditure and invest in key economic sectors to revive them. Utopian projects are an own goal and insensitivity.
Too much talk on taxation is causing Kenyans sleepless nights, leading to a pandemic of depression. What Kenyans want is the government to help them to mitigate the high costs of living. Piling on taxation on overburdened Kenyans is akin to flogging a dead horse. I am not an economist but the thinking in economy— am reliably informed—is that you cannot dig yourself out of economic meltdown through endless taxation but by cutting back on government expenditure and investing wisely in income-generating projects. Officials are not willing to do that, instead using their wealthy status as a template for taxation. The reality is, ordinary Kenyans cannot face any further taxation or higher tax on anything critical to their existence, such as ugali (for that is what many are doing; exist and not live).
Were I the government, I would drop the housing taxation or go back to the drawing board. I would support the banks financially so that they can offer Kenyans affordable mortgage commensurate to their income. Africa, indeed countries like Kenya, have greater opportunities of being bigger economies that work for all citizens. Addiction to greed among government officials is what ails the continent.
Mortgage products in Kenya favour the employed the most and this needs to change. Banks are the right unit to deal with housing and mortgage matters. Housing finance is a private matter between a customer and the bank. The government has nothing to do with such arrangements.
Given the level of corruption in Kenya advance housing payment to the government is no guarantee that one will get a home. NHIF is a case in point, whereby patients are let down at their hour of need despite paying their insurance premium.
The mortgaged house will stand as collateral and, as long as the borrowing rates are kept low, many Kenyans should be able to afford a home. Kenyans are not keen on borrowing from banks because the lenders are allowed too much sway on interest rates as they chase profits and the higher rates put off potential borrowers.
Let the government fund housing through the banks and force them to offer widely affordable mortgages to Kenyans.
- Ms Guyo is a legal researcher. [email protected]. @kdiguyo