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KUPPET Reject 3pc Housing Tax Before 30pc Teachers’ Salary Increment

KUPPET Reject 3pc Housing Tax Before 30pc Teachers’ Salary Increment

President William Ruto’s recent proposal to deduct three percent from workers’ salaries to fund the development of affordable housing has sparked widespread criticism from various stakeholders.

The proposal, included in the government’s budget for the 2023/2024 financial year, has drawn opposition from unions, business leaders, and political figures.

They argue that the levy is punitive and would have detrimental effects on workers’ finances and the overall economy.

The Kenya Union of Post Primary Education Teachers (Kuppet) has strongly opposed the proposed levy.

Kuppet’s National Vice-President, Julius Korir, and Secretary for Secondary Education, Henry Obwocha, have urged Parliament to reject the levy, labeling it as punitive.

They argue that before implementing such a levy, the government should prioritize increasing teachers’ salaries by at least 30 percent.

“It would make a lot of economic sense if the proposed levies were set against the backdrop of a salary increase.

They question the beneficiaries of the levy and express concerns about the long-term benefits for individual contributors.

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“Whose houses are we funding and how will we as individual contributors benefit from the levies in the long run?” Mr Korir wondered

Kuppet suggests seeking external partners to finance the construction of low-cost housing units instead.

“The superannuation scheme currently stands at 7.5 per cent of teachers’ salaries, yet there has been no [salary] increase by the Teachers Service Commission since 2016,” Obwocha said.

Leonard Langat, Chairman of the Kenya National Chamber of Commerce and Industry (KNCCI), has also cautioned the government about raising money through additional taxes and levies.

Government Clarifies Confusion Over 3% Housing Fund Contribution
Government Proposes Over 3% Housing Fund Contribution

He stresses the importance of careful consideration when attempting to fund the proposed national budget.

Langat recommends exploring other avenues, such as boosting exports of agricultural produce, goods, and services to generate revenue, create jobs, and enhance foreign exchange earnings.

Kuppet’s national gender secretary, Catherine Wambilianga, echoes the concerns raised by the union regarding the proposed deduction.

She emphasizes that the levy could adversely affect teachers’ morale and performance, exacerbating their already challenging financial situations and harsh working conditions.

Wambilianga highlighted the inadequacy of current salaries and argued that the proposed deduction would further worsen teachers’ financial burdens.

According to KUPPET, many teachers and civil servants are already servicing mortgages and other loans, making the imposition of a three percent housing levy an additional strain on their budgets.

Obwocha notes that this levy would particularly impact those nearing retirement, potentially jeopardizing their financial stability during their golden years.

These concerns emphasize the urgent need to reconsider the proposed levy and explore more equitable solutions.

Despite the growing opposition, President Ruto remains determined to pass the Housing Levy under the Finance Bill 2023.

He emphasizes the importance of pooling resources to provide affordable housing opportunities to ordinary citizens through the Hustler Mortgage initiative.

Ruto believes that this collective effort will enable more people to access mortgages and improve homeownership rates across the country.

Njuguna Ndung’u, the National Treasury Cabinet Secretary, defends the proposals outlined in the 2023/2024 Finance Bill.

He asserts that the tax proposals are subject to public participation and may be modified accordingly.

The bill also includes other amendments, such as reintroducing a 16 percent Value Added Tax (VAT) on petroleum products, which would increase their cost.

Additionally, individuals earning over Sh500,000 per month could face a higher tax burden of 35 percent.

These proposed changes have raised concerns about their potential impact on the cost of living.

Former Prime Minister Raila Odinga has joined the chorus of voices opposing the tax proposals. Odinga urges the National Assembly to reject the bill, highlighting the potential increase in the cost of living.

He specifically objects to the proposed 15 percent tax on digital content creators.

KUPPET Demands Teachers' Exemption from Ruto's Housing Fund Taxation.
KUPPET Demands Teachers’ Exemption from Ruto’s Housing Fund Taxation.

KUPPET Reject 3pc Housing Tax Before 30pc Teachers’ Salary Increment

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