President William Ruto's Administration Passes Finance Bill 2023 with Housing Fund Tax, Raises Concerns

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President William Ruto's Administration Passes Finance Bill 2023 with Housing Fund Tax, Raises Concerns

President William Ruto's administration in Kenya experienced a smooth session in Parliament on Wednesday, June 21st. The Finance Bill for 2023 garnered support from 184 lawmakers and was successfully passed.

During the process, the Parliamentary Finance and Planning Committee, headed by Molo MP Kuria Kimani and the United Democratic Alliance (UDA), proposed modifications to the report, which were incorporated into the Finance Bill for 2023.

One significant approved change is the introduction of the Housing Fund tax. This tax mandates both employers and employees to contribute a combined 3 percent towards the implementation of the Affordable Housing Program.

Lawmakers aligned with the Kenya Kwanza Coalition strongly supported the housing tax, with 184 votes in favor, while 72 lawmakers opposed it.

However, shortly after its passage, Homa Bay Town MP Peter Kaluma pointed out a major flaw in the process. He emphasized that the National Assembly was not authorized to discuss housing matters without the involvement of the Senate. Kaluma observed that MPs in the National Assembly, despite having their salaries mortgaged, imposed a 3 percent housing tax on employees and employers, even though housing is a county function that requires Senate participation.

As per the 2010 Constitution, county governments are responsible for ensuring prudent land use within their jurisdiction. The law explicitly states that county governments have the duty to prevent the misuse of land allocated for public purposes. Since the affordable houses will be located on land donated by the counties, it was expected that the Senate would deliberate on such a critical matter before implementing the tax for the program.

According to Article 96 of the Constitution, the Senate represents the counties and is primarily responsible for safeguarding their interests and those of their respective governments.

On Wednesday, June 8, Trade CS Moses Kuria made a statement clarifying that the Affordable Housing Program is not a project of the national government. He stated that the program would be carried out in various counties, with the 47 governors taking responsibility for its implementation.





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