Traders in Kenya’s informal sector are on the verge of facing severe consequences if they fail to pay the 1.5 percent housing levy, with Kenya Revenue Authority ready to freeze bank accounts and block PINs on those who do not comply with the levy as the authority scales up efforts to enforce compliance.
The levy was introduced by the government in July 2023 to fund affordable housing for low-income earners.
While a majority of the salaried employees comply through their employers, a number good enough to dent the economy, comprising hustlers operating businesses such as salons, bars, and corner shops, has been shunning paying the deductions.
Sheila Waweru, the acting CEO of the Affordable Housing Board, warned that the informal sector was contributing too slowly: “Contributions from the informal sector have been coming through slowly.”
She added that correct self-declaration was required: “If you are not truthful about your business, your income, and the people you have employed, then it also becomes difficult on our end and that’s when enforcement comes in.
To counter this, the KRA will send hundreds of revenue assistants on site visits to ensure businesses are registered and paying the levy. Waweru added, “They have foot soldiers who walk around even in the estates where businesses are.”
This is as the government works towards its target of constructing affordable homes, hustlers who fail to pay the levy risk facing severe repercussions including the suspension of services such as acquiring a tax compliance certificate, which is needed to qualify for housing units.
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