Federation of Kenya Employers has opposed Treasury's proposal to amend section 31 of the Employment Act for contributions for the new housing scheme.
Executive Director Jacqueline Mugo said the proposal by Minister Henry Rotich is unreasonable.
While presenting the Sh3 trillion 2018/19 budget last week, the CS said the tax plan will help increase home ownership by Kenyans across the country.
An amendment of the act would demand that an employer contributes 0.5 per cent of the employee's gross monthly salary to the National Housing Development Fund. The maximum amount would be Sh5,000 and the employee would contribute 0.5 per cent of their monthly gross earnings.
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Mugo said the Cabinet Secretary's announcement came as a surprise.
She
noted the existence of a Housing Act and
that introducing another tax to fund President Uhuru Kenyatta's Big Four Action Plan will strain both employers and employees.
"We find it difficult to support this proposal because we do not know the parameters and assessments that were done to arrive at the figure," she said on Wednesday.
The FKE director further argued that there was no guarantee of benefits to the employer and whether all employees in the formal and
informal settlement will have access to low cost housing.
Rotich said access will be either on a first come first served basis or through a lottery system as is the case in Ethiopia.
If established, the fund would be the third kitty after National Hospital Insurance Fund and National Social Security Fund that would see Salaried Kenyans contribute to on a monthly basis.