- KRA will intensify enforcement against Affordable Housing Levy defaulters, including freezing bank accounts and deactivating tax PINs.
- Defaulters face a 3 per cent monthly penalty on unpaid levy amounts.
- KRA is deploying 1,406 revenue service assistants to boost compliance, especially among informal businesses.
Kenyans who fail to remit the Affordable Housing Levy risk having their bank accounts frozen and their KRA PINs deactivated, as the Kenya Revenue Authority (KRA) launches a renewed compliance crackdown targeting both salaried and non-salaried taxpayers.
The enforcement drive is expected to focus heavily on the informal sector, where compliance has lagged behind formal employment since the levy was introduced.
Under the Affordable Housing Act, 2024, employees must contribute 1.5 percent of their gross monthly salary towards the levy, with employers matching the amount.
Individuals earning income outside formal employment, including traders and self-employed persons, are also required to remit 1.5 percent of their gross income.
Employers must remit deductions and matching contributions by the ninth working day after the end of each month, a deadline that also applies to individuals earning non-employment income.
Defaulters face a penalty equivalent to 3 percent of the unpaid amount for every month, or part of a month, that the levy remains outstanding.
KRA’s expanded ability to pursue defaulters stems from amendments under the Finance Act, 2026, which took effect on July 1. The changes introduced Section 39B of the Tax Procedures Act, empowering the KRA Commissioner-General to recover unpaid fees, levies and charges using the same mechanisms deployed against ordinary tax debtors.
Previously, KRA had been collecting the levy since July 2024 but lacked explicit legal authority to pursue defaulters, a gap that allowed many workers and firms to avoid payment.
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Under Section 42 of the Tax Procedures Act, the authority can now issue agency notices to banks, pursue recovery proceedings, seize funds from defaulters’ accounts, impose travel bans and pursue asset attachment, in addition to deactivating tax PINs.
Housing Principal Secretary (PS) Charles Hinga said the government expects “greater bite” from KRA following the legal changes, after the authority had previously held back from pursuing employers who deducted the levy from workers’ pay but failed to remit it.
Affordable Housing Board Acting Chief Executive Sheila Waweru said compliance from the informal sector has improved gradually, with some traders already contributing, though levels remain below those in formal employment.
To boost enforcement among traders, KRA is deploying 1,406 paramilitary revenue service assistants to visit business premises and verify registration and payment status.
Field officers and revenue enforcement teams will also work to record all eligible contributors in the tax system, Waweru said.
By Benedict Aoya
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