KRA offices at Times Tower, Nairobi.
The Kenya Revenue Authority (KRA) has confirmed that the Affordable Housing Levy (AHL) has been backdated to July 1, 2023.
In a statement on Friday, KRA announced that employers are required to submit the AHL deductions that were due for July 2023.
The employers will remit 1.5 percent for the month of August and 1.5 percent for July bringing to a total of 3 percent which should be submitted by September 9, 2023.
“With effect from 1st July 2023, all employers are required to deduct the AHL from the employee’s gross salary and remit together with the employer’s contribution as follows. One point five per centum (1.5%) of the employee’s gross monthly salary by the employee, One point five per centum (1.5%) of the employee’s monthly gross salary by the employer,” read the notice in part.
The authority emphasized that all employers are required to declare the AHL under sheet “M” of the PAYE return on iTax and generate a payment slip under the tax head “agency revenue” and tax sub-head “Housing Levy” and make payments at KRA agent banks or mobile money.
The taxman further warned that employers who will fail to remit the AHL deductions will risk a two percent penalty for the unpaid funds.
“Please note that the employer’s contribution to the Affordable Housing Levy is an allowable deduction under Section 15 of the Income Tax Act. An employer who fails to comply with the law shall be liable to payment of a penalty equivalent to two percent of the unpaid funds for every month if the same remains unpaid,” added the notice.
The Law Society of Kenya on Friday moved to court to block the new taxes in the Finance ACT 2023 arguing that they are unconstitutional.
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