- People have diverse financial priorities and circumstances, and imposing a compulsory levy limits their ability to make choices that best suit their needs.
- It is unfair to assume that a single housing scheme can cater to the diverse needs and preferences of all employees.
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As time ticks towards the 2023 budget reading and the presentation of the now famous Finance Bill 2023, it is becoming increasingly clear that majority of our MPs are going to vote for the Bill as it is.
The Bill seeks to legislate revenue streams and expenditure of the government for the 2023-24 financial year.
Life has generally been growing harder and harder over the past year. And with the recent removal of subsidies on a number of essential commodities, including fuel and maize flour, many households have cut on their expenditure on what they feel they can do without.
A significant number of families cannot afford sugar, for instance, and are drinking sugarless black tea. Now going through the Bill, one gets a feeling the cost of living will only get higher when it is passed.
One of the proposals in the Bill that has got majority of Kenyans talking, and not favourably, is the housing levy, which seeks to raise money for affordable housing.
Hypothecation of tax is not a new thing in Kenya, or any country for that matter. From time to time, governments all over world introduce levies to address specific priority areas that benefit all or majority of their residents. In Kenya, we have had road maintenance levy, fuel levy, among others, and we haven’t complained.
But this housing levy just doesn’t sound right. To me, it smells like forcing married people to contribute to a scheme that raises money for weddings!
The upcoming Finance Bill 2023 proposes a compulsory three per cent deduction from employees' salaries for a house they are unlikely to ever acquire. This proposal raises concerns about its fairness, particularly in a country where a significant portion of the population resides in rural areas and struggles to meet their basic needs.
Furthermore, the burden of high taxation and inadequate provision of essential services by the government further amplifies the unjust nature of this levy.
This article aims to shed light on why it is unfair to force people to contribute to a scheme they have no interest in, given the prevailing socioeconomic circumstances.
More than 60 per cent of Kenyans reside in rural areas, where the concept of formal housing is often distant and irrelevant. Forcing these individuals to contribute to a housing scheme that does not address their needs or aspirations is unfair and detached from their reality.
In many rural communities, the priority lies in access to clean water, electricity and improved agricultural practices rather than urban housing.
In urban areas, approximately 70 per cent of residents struggle to provide basic necessities for their families. With limited income, high cost of living and inadequate job opportunities, these individuals are already burdened with daily challenges.
Expecting them to allocate an additional three per cent of their earnings towards a housing scheme they are unlikely to benefit from further exacerbates their financial struggles. Instead of imposing an additional burden, the government should prioritise addressing the pressing needs of these urban dwellers, such as healthcare and quality education.
One of the fundamental aspects of fairness in taxation is the provision of essential services by the government. However, in many instances, Kenyan workers bear high tax burdens while receiving inadequate public services in return.
The lack of accessible healthcare facilities, substandard road infrastructure and a struggling education system are all indicators of the government's failure to fulfil its responsibilities.
Under these circumstances, imposing an obligatory housing levy appears unjust. It is imperative for the government to demonstrate its commitment to improving the quality of life for its citizens by efficiently utilising tax revenues to address pressing issues.
Failing to meet these basic expectations while imposing additional financial obligations on the people undermines the trust between the government and its citizens.
Forcing individuals to contribute to a housing scheme they have no interest in deprives them of the freedom to decide how to allocate their hard-earned income. People have diverse financial priorities and circumstances, and imposing a compulsory levy limits their ability to make choices that best suit their needs. It is unfair to assume that a single housing scheme can cater to the diverse needs and preferences of all employees.
Imposing a levy on individuals who are unlikely to benefit from the housing scheme not only undermines fairness, but also fails to align with the principles of individual choice and flexibility.
It is crucial for the government to reassess its priorities and focus on providing essential services before introducing additional financial burdens on its citizens.
There’s need to rethink this levy, and others that do not look fair.