Permanent Secretary for Housing and Urban Development Charles Hinga has now challenged Parliament’s Finance Committee to use its powers to make the necessary changes to the proposed National Housing Levy before the second reading scheduled for Thursday.
PS Hinga, while appearing before the National Assembly Finance Committee to explain the proposed working of the National Housing Development Fund said, views garnered during public participation will help incorporate necessary modifications into the bill.
“We can correct it but let’s not lose focus of why we are doing this,” Hinga said.
However, the PS maintains that the levy will be beneficial to employee contributors as the fund will not be subjected to tax on maturity.
He pleaded with the committee not to discard the entire Housing Levy proposal and instead, address the challenges and concerns raised.
The housing levy has attracted criticism over the lack of clarity over its governance structure and the safety of the money collected as well as the criteria that will be used to determine who qualifies to benefit.
The committee asked Hinga to clearly explain exactly what the 3% contribution is if not a tax because it will be mandatory.
The PS while responding argued that, unlike taxes where there is no direct relationship between what you pay and what you get, the Housing Levy confers a direct benefit.
PS Hinga’s recommendation to the finance committee comes amid the government’s hard stance of passing the bill without editing even a comma.
The Finance and National Planning Committee is scheduled to convene for a report-writing on Wednesday, which they are expected to consider views by stakeholders particularly the Federation of Kenyan Employers (FKE) who had expressed concerns that the Housing Levy would result in job cuts and proposed making the contribution voluntary.