Silvanus Osoro: Employers to be given time to match housing deductions
Majority Whip Silvanus Osoro when he addressed journalists in his office.
National Assembly Chief Whip Silvanus Osoro says the contentious Finance Bill, 2023 will be amended to give employers a moratorium to match the 3 per cent employee deduction into the Housing Fund.
Mr Osoro said there is a possibility of making changes to the Bill to allow employers with loans or cash flow challenges to adjust their finances before matching the employee contributions.
The Finance Bill seeks to amend the Employment Act to have 3 per cent of an employee’s basic salary deducted towards the Housing Fund to help finance the construction of low-cost homes. The Bill caps the proposed deductions, which will be matched by employers, at Sh5,000.
“Employers feel that they will be forced to retrench to cut their overheads. It is part of the discussion and there is a possibility of coming up with a moratorium structure,” Mr Osoro said.
He added: “It cannot be a complete ambush that if you have deducted an employee’s 3 per cent and you are not able to pay your part ... we are already crafting a formula that will enable the employer, and this I speak with authority, that will enable the employer to negotiate on the moratorium they need to pay this amount so that you plan your finances.”
Mr Osoro said there are employers who have loans and creating a moratorium of one year or six months will allow them enough time to settle or service their loans.
“And such are the discussions that we need to have. But as it is, this thing will not wait,” he said at a press briefing in Parliament.
Mr Osoro said the moratorium on the housing levy will be considered alongside other amendments to the Bill, including a reduction of the proposed 15 per cent tax on digital content creators. President William Ruto last week asked the Finance and Planning and the Information Communications Technology committees to review the proposed tax following opposition from creatives. He proposed that they be exempted from paying the tax for some time.
“The President has asked us to review the 15 per cent tax. But this will not be dropped, it will be implemented gradually,” Mr Osoro said. He explained that the content creators will be allowed to pay less tax of say 6 per cent, and gradually grow to 15 per cent.
