Kenya revenue authority KRA has released a gut-wrenching statement to employers over house levies.
In a statement to the press, KRA says taxation of house levy will cut across Basic Salary and Allowences.
This means that despite an increase of salary by 7-10 percent on the basics, the tax man will reap all the benefits emanating from the increase.
“Kenya Revenue Authority wishes to make the following clarification with respect to the AHL:
“”Gross monthly salary” constitutes basic salary and regular cash allowances. This include housing, travel or commuter, car allowances and such regular cash payments and would exclude those that are non-cash as well as those not paid regularly such as leave alowance, bonus, gratuity, pension, severance pay or any other terminal dues and benefits.
“All employees irrespective of their contract of service shall pay the affordable housing
levy.
“Taxpayers paying housing levy under Section 31B of the Employment Act are not eligible for Affordable Housing Relief under the Section 3OA of the Income Tax Act Cap. 470.” The statement read in part.
