Jubilee presidential flagbearer Fred Matiang’i has called for the scrapping of the housing levy, arguing that the tax has placed an additional financial burden on Kenyans amid rising cost of living.
Speaking during an interview with NTV, Matiang’i said abolishing the levy would help address concerns over excessive taxation while putting more disposable income in the pockets of households.
“Quite frankly, in my view, we should scrap this housing levy because it is very burdensome when you look at it,” he stated.
The former Interior Cabinet Secretary also proposed raising the threshold for non-taxable income from the current level to Sh35,000 to ease pressure on low- and middle-income earners.
He argued that increasing the amount of money workers take home would help stimulate household spending and gradually support economic recovery.
“There is a need to increase disposable income in the pockets of our people by, for example, raising the ceiling to non-taxable income to even Sh35,000, so that slowly we can begin to have some recovery,” Matiang’i said.
He identified wastage of public resources, excessive bureaucracy and corruption as some of the major challenges facing the country, warning that corruption had reached unprecedented levels.
“But the greatest challenge is wastage of resources, bureaucracy and corruption. Corruption has reached unprecedented levels. Sometimes I feel people have not come to terms with the gravity of our situation,” he said.
Matiang’i called for bold and decisive interventions to address the country’s economic challenges, saying the government would need to undertake far-reaching reforms in public spending and critical sectors.
“There is need to be courageous, radical and decisive to be able to get the country where it is right now,” he said.
He proposed a review of the national budget to identify areas where expenditure could be reduced and public resources redirected towards essential services and development priorities.
“That will mean we will have to relook at our budgeting to see whether we can stop the wastage that we have. We then need to work on critical sector reforms, address corruption, security, bureaucracy. These are measures we will need to take urgently,” he added.
Matiang’i’s remarks place the housing levy among the emerging policy issues likely to feature prominently in the 2027 presidential campaigns, with political leaders divided over its economic impact and role in financing affordable housing.
President William Ruto has consistently defended the levy, criticising politicians opposing it and challenging them to provide alternative ways of creating jobs for young people employed in the affordable housing programme.
The President has maintained that the contributions, provided for under the Affordable Housing Act, 2024, are necessary to finance housing development and improve living conditions for families in informal settlements.
Under the framework, employees contribute 1.5 per cent of their gross monthly salary, with employers making a matching contribution, towards the affordable housing programme.
