Kenya Revenue Authority (KRA) has assumed a pivotal role in collecting the Affordable Housing Levy (AHL) as mandated by the Affordable Housing Act of 2024.

Effective from March 19th, 2024, employers are entrusted with the responsibility of deducting AHL from employees' gross salaries and remitting it, along with their own contributions, as outlined by the regulations.

"Kenya Revenue Authority (KRA) informs members of the Public that the Affordable Housing Act, 2024 designates KRA as the 'Collector' of the Affordable Housing Levy (AHL)," KRA stated in a statement.

"With effect from 19th March, 2024, all Employers are required to deduct the AHL from the employee's gross salary and remit together with the employer's contribution."

Under the provisions of the act, both employees and employers are required to contribute 1.5 per cent of the employee's gross monthly salary towards the AHL.

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Additionally, all individuals receiving income or whose income is accrued within Kenya are mandated to remit 1.5 per cent of their gross income to KRA as the Affordable Housing Levy.

The deadline for remittance of the AHL is the 9th working day following the end of the month in which the gross salary was due or the gross income was received or accrued.

KRA has provided clear guidelines for compliance, instructing employers to declare the AHL under sheet "M" of the PAYE return on iTax.

Furthermore, they are required to generate a payment slip under the tax head "agency revenue" and tax sub-head "Housing Levy," making payments through KRA agent banks or mobile money via the eCitizen Paybill Number.

Importantly, the employer's contribution to the AHL qualifies as an allowable deduction under Section 15 of the Income Tax Act.

Moreover, residents who fulfil their AHL obligations are entitled to benefit from affordable housing relief.

Non-compliance with these regulations carries consequences, with individuals failing to adhere to the law liable to pay a penalty equivalent to three per cent of the unpaid funds for each month of non-payment.

"Any person who fails to comply with the law shall be liable to payment of a penalty equivalent to three per cent (3 per cent) of the unpaid funds for every month if the same remains unpaid," KRA warned.

Expressing its commitment to facilitating compliance, KRA emphasizes its dedication to providing optimal support to all stakeholders.

KRA also pledge ongoing engagement and collaboration to enhance adherence to AHL provisions, ensuring effective implementation of the Affordable Housing Act, of 2024.