Lawmakers have rejected the proposal by the government for persons seeking houses under President William Ruto's affordable housing plan to deposit 10 per cent of the value.
After weeks of public participation on the Affordable Housing Bill, 2023, the joint committees on Finance and that of Housing have recommended the clause providing for the deposit be deleted.
“The committee noted stakeholders concerns and agreed to delete the amount of 10 per cent as a deposit and further recommend that the deposit amount be prescribed in the regulations,” the committee said in a report tabled in Parliament on Wednesday.
A reading of the report by the committee co-chaired by Molo MP Kimani Kuria and his Emurua Dikkir counterpart Johana Ngeno shows that MPs employed a give-and-take approach in the contentious legislation.
In a blow to Hustlers, MPs have stretched the deductions beyond salaried persons and recommended that the same apply to income earned by persons in the informal sector.
“Provisions of the Tax Procedures Act of 2014 shall apply,” MPs said on the call by some stakeholders for informal sector players to be included in the levy system.
The courts in the ruling against the Finance Act, 2023, raised questions on whether the levy was discriminatory if only applied to people who are salaried.
Leader of Majority Kimani Ichung’wah said the committee has provided safeguards in the amendments to the question.
“The amendment that the committee is proposing has cured this matter in Clause 4 by providing that apart from salaried persons, the gross income of a person in the informal sector is also subjected to this levy,” the Kikuyu lawmaker said.
Among other amendments proposed by the committee in the report which MPs debated at length on Thursday, is that professionals in the housing industry will be incorporated in the affordable housing board as proposed in the law.
The committee has also dropped the provisions in the Bill which would have seen the acquired houses used as collateral in the event of a buyer defaulting payments.
The Housing Bill provided that to govern loan repayments, the house was to be considered as security.
“The committee was of the view that the clause as proposed was so retrogressive and recommended its deletion,” the report reads.
MPs have also recommended changes to the law to drop the proposed three per cent monthly penalty for employers who fail to match their employee’s contributions.
The committee has recommended that the penalties in the Tax Procedures Act will apply to those in default of repayment.
MPs have also removed the ambiguity that was viewed as giving the rich an undue advantage in acquiring houses.
Instead, the committee says that the applications would be restricted to “one KRA pin one house among other unique identifiers.”
In a gain to colleges and public universities, the committee recommended changes to the Bill to include institutional housing as part of affordable housing.
The argument by lawmakers is that in providing affordable housing options directly through the university, students would access to safe and affordable living environments.
“The committee recommended that the Bill be amended to include institutional housing as part of the affordable housing programme,” MPs said.
The committee has also recommended changes to the law to provide for internship for students in TVET institutions within areas where affordable housing is being undertaken.
MPs have also made it mandatory that implementers use locally available materials in the development of affordable housing units.
Businesses or companies that comply with the obligation to deduct and remit the 1.5 per cent of employees’ gross salary are exempt from other levies.
On the flip side, MPs have rejected calls that the National Housing Corporation board could suffice as the implementing agency for the affordable housing agenda.
“As currently crafted, the objective of the NHC is to provide loans and grants of public money for the construction of dwellings.”
“On the other hand, the objective of the Affordable Housing Bill is to provide a legal framework and a funding mode for the provision of affordable housing to Kenyans,” the committee said.
The committee holds that the two boards would complement each other “through a structured way.”
Even so, MPs have warned that the Bill may run into headwinds if not handled carefully during the debate and approval process.
Members from the Opposition benches raised concerns that the Bill was worded as not affecting counties, alleging an attempt to sidestep the Senate.
Minority leader Opiyo Wandayi flagged the anomaly saying the Bill has been characterised as a Bill not concerning counties.
“The House needs to be guided by your chair whether that consultation between yourselves under Article 113 has taken place and you have resolved that this Bill is a Bill that doesn't concern counties and therefore doesn't have to go to the Senate. That has to be clarified,” the Ugunja MP said.
National Assembly Speaker Moses Wetang'ula however dismissed the assertions saying the “misdescription in the memorandum and the objects of the Bill is something curable.”
“In any event at the end of the passage of this Bill, the memorandum and objects of the Bill are mere descriptions, they will not become part of the Act that you will eventually pass. The content is in the clauses in the Bill,” he said.