The Kenya Revenue Authority (KRA) has issued directives regarding the Affordable Housing program following a High Court ruling endorsing President William Ruto's flagship project. The announcement was made on Thursday, March 21, clarifying the implementation process.

According to the notice, deductions for the Affordable Housing Levy (AHL) commenced on March 19, 2024. Employers are now required to deduct 1.5% of their employees' gross monthly salary, matched with an equal contribution from the employer.

Employers must declare the levy and make payments through KRA agent banks or mobile money using the eCitizen Paybill Number 222 222 or the USSD code *222#.

Contributors to the AHL are eligible for a 15% housing tax relief. This relief can be claimed by individuals who, after a year of contributing and saving through the Boma Yangu platform for a housing unit, apply for the relief.

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KRA emphasized the necessity for compliance with AHL deductions, warning of penalties equivalent to three percent of the unpaid funds for each month of default.

"The due date for remittance of Affordable Housing Levy is the 9th working day after the end of the month in which the gross salary was due or gross income was received or accrued," the notice stated.

Employers are required to declare the AHL under sheet 'M' of the PAYE return on iTax, generate a payment slip under the tax head 'agency revenue,' and make payments through KRA agent banks or mobile money using the eCitizen Paybill Number.

"The employer's contribution to Affordable Housing is an allowable deduction under Section 15 of the Income Tax Act."

These directives come in the wake of the High Court ruling declining to issue conservatory orders against the implementation of the program, following a petition seeking to halt the government from collecting the levy starting this month.

President Ruto, a staunch advocate for the project, signed the Affordable Housing Bill into law on March 19, 2024, signaling its official commencement.