Media Owners Association has come out to oppose the proposed 3 per cent housing fund deductions.
The government proposed the deductions in the Finance Bill 2023.
In a statement on Tuesday, Media Owners Association chairperson Agnes Kalekye said the proposed contribution would significantly dent employees' take-home salaries.
"As employers, the media companies in this country are quite concerned with this proposal. Employees are already heavily burdened with an average tax rate of 30%, and contributions to NSSF, as well as to NHIF," she said.
The bill proposes to introduce a requirement for employees and employers to contribute to the Housing Fund in an equal amount computed as 3% of the employee's basic salary. The sum of the contributions is, however, limited to Sh5,000 per month.
Kalekye said by employers contributing the same amount for their employees, it will increase the cost of employment.
"Most employers would be forced to lay off a good number of their personnel in order to sustain those who remain on the payroll," she added.
Kalekye said the association foresees the proposal to be inimical to the Kenya Kwanza government's agenda.
She said employees would take home reduced income amounts which curtails spending power and therefore a ripple effect on small businesses.
"Equally so, savings and investments would be curtailed; A good number of individuals/ employees have already invested in personal housing projects," she said.
"Introducing a mandatory contribution that does not benefit the employee in any way would not go down well with the tenets of building a society as well as a growing economy."
She added that a sizeable number of employees are servicing mortgages with financial institutions, and asking them to surrender another 3% of their income would not be beneficial to them.
The MOA boss said the provision of housing is not a fundamental or basic right in the constitution of Kenya.
"The government has no reason to mandatorily collect contributions towards providing housing to its ) citizens. We are of the view that employees should be permitted to choose their investment strategies by themselves."
She said the association finds the proposal somewhat discriminatory as a good number of the employees contributing are already disqualified from accessing the government's affordable housing scheme.
"Having employers contribute an equal 3% or maximum of Sh2,500 per month for each employee would grossly inflate the cost of employment," she said.
Kalekye added that large organisations having a high number of personnel would be forced to reduce their workforce to sustain a smaller number of employees on the payroll.
The association said the government has not made evident how the housing fund proposal will be managed.
They proposed that the government deletes the proposal or make the contribution optional for employees, and exclude employers from contributing.