TSC Teachers Set to be Deducted 3% of their Basic Salary from May for Housing Project
TSC Teachers Set to be Deducted 3% of their Basic Salary from May for Housing Project. Teachers and government employees may soon have housing fund deductions taken out of their paychecks following an amendment to the 2007 Employment Act that allows rapid withdrawal from employee salaries.
The Employment Act of 2007 is revised by adding the new section listed below directly after section 31A, as stated in clause 76.
31B 1) An employer must contribute money for each employee to the National Housing Development Fund created by Section 7 of the Housing Act.
(a) A three percent employer contribution of the employee’s basic monthly income; and
(b) the employee contribution at 3% of the employee’s basic monthly wage, provided that the total of employer and employee contributions does not exceed 5,000 shillings per month.
The government is aiming to raise additional money through deductions in the Finance Bill, 2023, which contains tax measures for the 2023–2024 fiscal year.
According to President William Ruto, the donation will assist teachers and government employees in purchasing homes constructed as part of the Affordable Housing Programme.
Kenyans, according to him, will make monthly contributions.
We have a housing fund to which we want every Kenyan to contribute 3% of their income in order to enable many Kenyans to purchase homes under the affordable housing scheme. If you make Sh10,000, 3 percent, or Sh300, goes toward the fund each month, according to Ruto.
According to the law, any employee who contributes 3% to the Housing Fund must also have their employer contribute 3%.
The President stated that the nation’s almost 700,000 public employees will be the first to begin saving through the Housing Fund.
Every civil servant who saves 3% of their income would receive 3% of their monthly salary from the government, according to Ruto, “so that we can establish a fund that will help the people of Kenya acquire homes.”
The President also noted that there are presently only 40,000 mortgages in the nation, despite the fact that there should be up to 2 million in order to reflect the size of the economy.
Teachers’ May Salary Reductions of 3%
According to Ruto, a large number of Kenyans reside in unofficial settlements and require an improvement in the standard of their homes.
As part of his ambition to provide affordable housing, Ruto plans to construct up to 100,000 homes in Nairobi.
Kenyans who make at least Sh500,000 per month would also pay more in taxes due to the Finance Bill’s proposal to increase the country’s income tax from 30% to 35%.
A worker making Sh500,000 will have to pay over Sh200,000 in taxes as a result. The suggestion comes after President Ruto harshly criticized the wealthy and even suggested enacting a wealth tax.
The Treasury also plans to target Kenya’s digital content makers, an industry that has drawn the attention of young people by providing an alternative to a population group heavily impacted by unemployment, so the pain won’t just be felt by the salaried.
15% of payments made in connection with the monetization of digital content would be subject to a withholding tax under the proposed law. The levy will have a huge impact on thousands of young people who currently make a living from the digital space and comes at a time when the government has actively encouraged investment in internet connectivity and technology to tempt the unemployed.
The Bill suggests that 15% (withholding tax) be applied to payments related to the monetization of digital material.
Additionally, Treasury has suggested increasing the turnover tax from 1% to 3% for businesses with annual revenues as low as Sh500,000. More small and medium-sized businesses (SMEs) will be impacted by this decision, many of which might not be stable.