The Kenya Revenue Authority (KRA) has ordered employers to deduct the Affordable Housing Levy (AHL) from their employee's salaries effective July 1, 2023.

The directive comes shortly after the government, through the Ministry of Lands, Public Works, Housing and Urban Development, backdated the mandatory contributions as proposed in the Finance Act, 2023.


This is after the Court of Appeal lifted a conservatory order barring the implementation of the Act last week.

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In a statement on Friday, KRA’s Commissioner for Domestic Taxes wants employers to remit its 1.5 per cent contribution alongside a similar rate for their employees.

“With effect from 1st July, 2023, all employers are required to deduct the AHL from the employee's gross salary and remit together with the employer's contribution,” read part of the statement.

“KRA wishes to further clarify that all employers are required to declare the AHL under sheet ‘M’ of the PAYE return on itax and generate a payment slip under the tax head ‘agency revenue’ and tax sub-head ‘Housing Levy’ and make payments at KRA agent banks or mobile money.”

Further, KRA noted that employers who fail to remit the deductions shall be liable to pay a penalty equivalent to two per cent of the unpaid funds every month until they comply with the law.