The government has revised upwards its expectations for the Affordable Housing Levy collections this financial year, setting a new target of Sh97 billion. The adjustment, reflected in supplementary budget documents presented to Parliament by Treasury Cabinet Secretary John Mbadi, follows stronger compliance and improved collection mechanisms that have been enforced despite previous legal and political controversies surrounding the monthly deductions from workers’ pay slips.
In the 2024-25 financial year, the Kenya Revenue Authority recorded Sh73.2 billion in levy receipts, surpassing the National Treasury’s earlier projection of Sh63.2 billion.
Achieving the Sh97 billion target would mark a rise of 32.51 percent compared to last year’s collections. During the levy’s first year, up to June 2024, employees and employers contributed Sh54.16 billion, slightly below the initial Sh54.58 billion goal by Sh415 million, a shortfall of less than one percent.
Collections had been halted for three months between January and March 2024 after courts deemed the deductions unconstitutional, ruling that the levy unfairly targeted formal sector employees while ignoring those in informal employment.
The decision prompted a swift legislative response. Lawmakers passed the Affordable Housing Act 2024, which President William Ruto signed into law on March 19, 2024, correcting the legal gaps and broadening the levy to include informal sector workers.
The administration has maintained a firm approach on enforcing the levy, pushing back against critics who have questioned its fairness, legality, and the speed of fund utilization. The programme forms part of a broader government drive to ensure adequate and affordable housing nationwide.
“Three years ago, when we said we would deliver affordable housing, the cynics dismissed it as a fantasy. When they realised we were serious, they called it impossible. And when we broke ground across the country, they suggested that the projects would stall,” Dr Ruto said during his third State of the Nation Address last November.
