The Kenya Revenue Authority (KRA) has surpassed the revenue target for the Housing Levy Funds, having collected Ksh73.2 billion in the 2024/2025 fiscal year.
The overperformance reflects improved compliance by employed Kenyans, despite concerns over the statutory deductions, which have faced several legal and political challenges in recent years.
According to KRA, it exceeded the target by Ksh10 billion, having projected an estimated collection of Ksh63.2 billion from taxpayers during the last financial year.
The report shows that the deductions, made monthly at a rate of 1.5 per cent of gross salary, amounted to 115 per cent of the set target.
However, almost half of the collected funds have yet to be spent on affordable housing construction, as the project is being rolled out across the country in phases.
Following the overcollection, the government has now resorted to investing the excess funds in debt instruments, including Treasury bills and bonds, to generate additional returns.
The latest announcement comes a fortnight after President William Ruto assured Kenyans that the Housing Levy funds would be utilised responsibly to accomplish key government initiatives.
Addressing members of the public on August 13, the Head of State acknowledged receiving numerous concerns from Kenyans who lamented the statutory deductions.
According to him, despite the public uproar, the Housing Levy deductions were important for the country’s benefit.
"People have been asking me about the Housing Levy Fund. This is the transformation that the housing levy and the housing fund will bring to us as a nation," Ruto said during the groundbreaking ceremony for the construction of hostels at Tom Mboya University in Homa Bay.
"Apart from building affordable houses, we are also constructing 400 new markets across Kenya, and now we are turning the housing infrastructure into student accommodation," he added.
Since its implementation in March 2024, all employers are required to deduct the money at the rate of 1.5 per cent every month from the employee’s gross salary and remit to KRA.
The due date for remittance of the Affordable Housing Levy is the 9th working day after the end of the month in which the gross salary was due.
