President William Ruto has defended the Affordable Housing Levy, saying proposed changes to Pay As You Earn (PAYE) tax rates will leave workers, including teachers, with more money in their monthly take-home salaries.
Speaking during the official opening of the Kenya Comprehensive School Heads Association (KECSHA) meeting in Mombasa on Thursday, Ruto explained that the proposed tax adjustments would more than compensate workers for deductions made under the Affordable Housing Programme.
The President gave the example of a teacher earning KSh50,000 per month, saying the employee currently contributes KSh750 towards the Housing Levy but would save approximately KSh2,000 through the proposed PAYE tax reductions.
This would translate into an additional KSh1,250 in monthly take-home pay despite the continued housing levy deduction.
The proposed tax reforms seek to increase the monthly PAYE tax free income threshold from the current KSh24,000 to KSh32,000. The wider proposal also seeks to raise the threshold to KSh32,333 while abolishing the existing KSh2,400 personal relief.
Under the proposed arrangement, employees would not pay PAYE on the first KSh32,000 of their monthly taxable income, allowing workers to retain a larger portion of their salaries.
However, the Affordable Housing Levy, charged at 1.5 per cent of gross monthly salaries, would remain in place.
Ruto defended the levy, arguing that the government's development projects were creating employment opportunities while providing affordable homes, markets and accommodation facilities for students.
He revealed that approximately 1.1 million people were working under the housing programme, adding that contracts covering housing projects, markets and student hostels had reached KSh1.2 trillion.
The President further disclosed that accommodation facilities with a combined capacity of more than 180,000 learners were under construction across the country.
Ruto also said the government plans to promote 50,000 teachers during the current financial year.
He described the planned exercise as the largest single-year teacher promotion initiative in Kenya's history.
The President said the new career progression guidelines had been concluded following consultations between the government, the Teachers Service Commission (TSC) and teachers' unions.
"The new career progression guidelines that we agreed with the Teachers Service Commission and the unions were concluded two days ago and approved," Ruto said.
The proposed promotions are expected to provide career advancement opportunities for thousands of teachers across the country.
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