The Affordable Housing Fund Board has urged Parliament to grant the Kenya Revenue Authority (KRA) stronger enforcement powers to tackle evasion of the 1.5 per cent housing levy, warning that gaps in the current legal framework undermine compliance and limit revenue collection.
Appearing before the National Assembly Departmental Committee on Finance and National Planning during a stakeholder engagement in Kiambu County on Wednesday, June 10, 2026, Board Chairperson Jeremiah Simu said KRA already has the infrastructure to enforce compliance but lacks the necessary legal backing.
“We are currently collecting about Sh5.6 billion per month, and we believe that if KRA is given the power to enforce payment of the Housing Levy, we would collect a further Sh3 billion,” Simu told MPs.
The Board has proposed amendments to the Tax Procedures Act to explicitly empower KRA to recover unpaid housing levy contributions as a civil debt owed to the government, using enforcement mechanisms similar to those applied in tax collection.
Simu referenced findings from the Auditor‑General’s audit of the Affordable Housing Fund, which identified cases of levy evasion, noting that KRA itself had acknowledged its limitations.
However, Committee Chairperson Kuria Kimani raised concerns about expanding KRA’s mandate, warning that additional responsibilities could strain the authority’s resources. He asked whether the Board would be willing to allocate a portion of collections to support enforcement.
ALSO READ:
Omtatah demands Senate probe into affordable housing projects over land-grabbing claims
“What you are asking will give more responsibility to KRA and strain their resources. Would you be willing to cede up to 2 per cent of the collections to enable them to do the enforcement?” Kimani asked.
The Board maintained that the proposal would not introduce a new tax or raise existing rates, but would instead enhance fairness by ensuring compliance across both formal and informal sectors.
At the same time, the Board defended the affordable housing programme against proposed changes in the Finance Bill, 2026, which seek to remove VAT exemptions on construction materials. Officials warned that scrapping the exemption would significantly raise construction costs, drive up house prices and slow delivery of housing projects, undermining government targets.
According to the Board, building a stronger enforcement framework and maintaining supportive fiscal policies are critical to ensuring the success of Kenya’s flagship housing programme.
By Masaki Enock
Get more stories from our website: Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
