HIC in Solidarity with Kenyan Member Petition on the Proposed Housing Levy as Drafted in the Finance Bill, 2023

HIC

Habitat International Coalition (HIC) stands in solidarity with its Members in Kenya calling for a petition on the below actions and recommendations related to the proposed housing levy.

Kenyan citizens and, to a large extent, the vulnerable populations, various social movements and concerned members of civil society defending socio-economic rights pose alternatives to some of the proposed provisions in the Finance Bill, 2023 tabled by Kenyan President William Ruto. Article 118 (1) (b) of the Constitution of Kenya requires Parliament to: 

  1. Facilitate public participation and involvement in the legislative and other business of parliament and its committees and the National Assembly standing order 127 (3) requires House Committees considering bills to facilitate public participation; To achieve adequate participation toward enactment of the Finance Bill, 2023, the Committee on Finance and National Planning has undertaken public oral submission before the final reading of the Finance Bill, 2023
  2. We note that it has been the tone and opinion of majority of the petitioners who have petitioned the Finance Committee of the National Assembly on the Proposed Financed Bill this is being used as a tool for oppression by overburdening Kenyans through taxation facilitated and orchestrated by the multilateral partners who are darlings of this regime. 
  3. That the proposed housing taxation, christened by the government as a housing levy harbors the following contradictions:
    1. It lacks implementation mechanisms or regulations,  suggesting the intended abuse of public resources. The reality of this is the proposal in the Finance Bill for this section to be in effect by 1 July, 2023. Policy makers have treated with contempt the indispensable  consultation with the public on the rules and regulations. 
    2. The Bill also seeks to make the tax mandatory for anyone purchasing a house, regardless of the fact that some persons already have homes and/or a servicing mortgage. This is another red alert as to how taxation and such supposed funds previously have been used to misappropriate public resources with multilateral agencies supporting them. 
    3. These mandatory salary withholdings and employer contributions come at a wrong time in the economy, while Kenyans are struggling to meet their basic needs. Therefore, these deductions will only make survival more difficult by pushing the majority of the population into squalor, defeating the very purpose of building back stronger. 
    4. While the government narrative has focused more on the need for affordable housing as a pretext for levying the new tax, citizens are left to wonder as to the place of social housing in the national scheme. The bill does not create avenues for the majority of citizens in the informal economy who desperately need adequate housing. 
    5. Another red flag is that the capping of total contributions at KES 5,000 per month is a paradox. Even if we were to agree on the proposed mandatory tax to establish a housing fund, it would contradict itself: At this rate, it would take an individual 50 years before concluding payment to the housing fund in order to benefit. This is tying the majority of Kenyans to paying debts in perpetuity. 

The taxpayers are already overburdened, and the Finance Bill, as conceptualized, is a stark indication as to how the multilateral partners are coercing Kenyans through their political leadership to repay debt for loans that the sovereign people explicitly have long ago rejected. 

For more info, please contact: gs@hic-net.org 

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