Blow to opposition as Ruto wins first round in Housing levy bill
A view of the National Assembly in this picture taken on February 13, 2024.
What you need to know:
- The Bill, has been passed as per the wishes of the Kenya Kwanza Joint Executive and Parliamentary Group (PG) retreat chaired by President Ruto in Naivasha on Monday.
- The passage of the contested Bill was however not without blemish after about 20 Azimio la Umoja One Kenya Coalition MPs walked out of the House.
President William Ruto yesterday scored another big number after the National Assembly passed the Affordable Housing Bill 2023 which seeks to align with the court’s ruling, putting breaks on its implementation.
The proposed law now set to be transmitted to the senate for concurrence, raids the pay slips of salaried Kenyans as it potentially subjects their gross income to a 1.5 per cent housing levy.
The Bill has been passed as per the wishes of the Kenya Kwanza Joint Executive and Parliamentary Group (PG) retreat chaired by President Ruto in Naivasha on Monday.
Going by how the government whipped its members to back the controversial Bill, it is unlikely that it will be undone by the Senate.
The passage of the contested Bill was however not without blemish after about 20 Azimio la Umoja One Kenya Coalition MPs walked out of the House as it was being considered at the committee stage (Third Reading).
The Azimio MPs led by Minority Whip Junet Mohamed (Suna East), ODM chairman John Mbadi (nominated), Dr Otiende Amollo (Rarieda) and Babu Owino (Embakasi East) accused the House leadership of blocking members’ proposed amendments on the Bill “on instructions from the executive.”
Opposition legislators led by Busia Women Rep Catherine Omanyo addressing the media at Parliament Buildings Nairobi on Wednesday, February 21, 2024 over the controversy surrounding the housing levy.
“Our members had amendments but it looks like there are instructions to pass the Bill the way it is,” said Mr Junet adding; “we have decided to walk out and have the matter dealt with in the court of public opinion.”
What infuriated the opposition MPs into walking out was their failure to have the 1.5 levy imposed on basic or net salaries as opposed to gross monthly pay.
“Where you want to have the levy imposed on net pay so that you reduce the amount we will not support it,” said Kikuyu MP Kimani Ichung’wah, the leader of the majority in the House.
Efforts by Githunguri MP Gathoni Wamuchomba to have the 1.5 levy deleted from the Bill also failed as her attempts to have the existing National Housing Corporation (NHC) be in charge of the affordable housing project as opposed to creating another body that will likely lead to duplication of roles.
The Bill was introduced in the House in December last year after the High Court declared it unfair, discriminatory and unconstitutional. The housing levy was introduced following an amendment to the Employment Act through the Finance Act 2023 that limited the levy to salaried employees in the formal sector.
The Bill seeks to establish the Affordable Housing Fund, where the levies deducted from incomes shall be paid, to be managed by a board.
To address the issues raised by the court, the Bill has expanded the imposition of the affordable housing levy to include incomes other than salaries paid to employees in the formal employment sector.
The Azimio MPs have since indicated that they intend to challenge the Bill in court once signed into law “because it is not helping Kenyans.”
“This is not a lawmaking process; it is a charade. It is a House of parliament rubber stamping a lawmaking process and we are not going to be part of it,” Mr Junet said.
He noted that a majority of the Azimio MPs were coerced into adopting the Bill at the second reading on Tuesday evening or risk having the government-sponsored projects in their constituencies stopped.
“I had a meeting in my office with Azimio MPs who voted for the Bill on Tuesday evening and what they said was very disheartening. They told me that they were under firm instructions to vote for the Bill or risk having the projects in their areas, including relief food distribution, stopped,” he said.
Dr Amollo wondered why the national government was keen to undertake the housing project yet the provision of housing is a county function as stipulated in the fourth schedule of the constitution.
The Rarieda MP said this even as he raised issues with the manner in which the Bill had been fast-tracked within three days.
“This Bill as conceived is unclear who will benefit from this housing project and whether it is by renting or ownership. They are seeking to levy the gross salary and not the net income. The instructions that have come are to shoot down all our proposed amendments. Therefore, the process going on is robotic and prejudged,” said Dr Amollo.
Mr Mbadi accused President Ruto of failing to listen to the concerns of Kenyans on the Bill saying it is akin to dictatorship.
“What Kenyans are witnessing and staring at is dictatorship. President Ruto does not care about the needs of Kenyans as long as it is his interests being served,” said Mr Mbadi adding; “this bill is not good for Kenyans and the leadership of the Kenya Kwanza knows it.”
Seme MP Dr James Nyikal faulted the government for bulldozing its way just because it had numbers in parliament.
“We have a government that has abandoned all principles of management and legislation because it has a majority in the House. But I want to warn that many of the things they are passing will fail at implementation,” said Dr Nyikal.
The Bill goes on to say that the defaulted or unremitted amount shall be “summarily” recovered as a civil debt from the entity or person liable to remit the amount.
Currently, an employer who defaults in remitting the amount is liable to payment of a penalty equivalent to 2 percent of the unpaid funds for every month if the same remains unpaid.
Mr Ichung'wah scoffed at the Azimio MPs' walkout, saying their attempt to bully fellow colleagues to stall the legislative process backfired.
President Ruto is targeting to construct 200,000 affordable housing units annually, which he has promised will create between 600,000 and 1 million jobs each year.
In a bid to actualise this, the National Assembly has appropriated and ring-fenced Sh73 billion in the current financial year’s budget towards the project that seeks to facilitate the provision of funds for affordable housing and affordable housing schemes in the promotion of homeownership among Kenyans.
