The administration now maintains there is still time to amend the proposed National Housing Levy in the Finance Bill before its second reading on Thursday.
Housing and Urban Development PS Charles Hinga asked Parliament's Finance Committee to exercise its powers to modify the Bill based on public input gathered over two weeks.
The PS claimed the levy would benefit employee contributors because the fund would not be taxed at maturity.
The PS, under whose administration the majority of the housing project would be carried out, went before lawmakers to explain the intended workings of the National Housing Development Fund. He needed help clarifying what the 3% contributions entailed.
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The housing levy has been criticized for discriminatory policies that appear to favour the rich over the poor, a lack of clarity over its governance structure and the safety of the funds collected, as well as the criteria that will be used to determine who qualifies to benefit from the affordable houses that the government intends to build using the fund.
While the administration earlier stated that the financial measure would be adopted as is, the PS is open to a few amendments here and there.
The Finance and National Planning Committee is scheduled to meet on Wednesday to write its report, with sources indicating that the Bill could be altered to reflect the opinions of stakeholders, notably the Federation of Kenya Employers (FKE).
FKE stated in its committee presentation that the 3% mandatory proposal would result in employment losses and urged the charge to be voluntary.
According to sources, behind-the-scenes negotiations between the government and the employers have resulted in the government ceding ground and discussing the possibility of lowering the levy by one per cent to increase the planned rate to 2%.
This proposal is being considered as the Committee drafts the report for the second reading in Parliament next week.
At the same time, the PS has clarified that one of the changes the government will make to the proposals is to include a provision ensuring that all contributors to the fund are eligible to benefit from the houses built, as opposed to the current situation in which some cadres of employees contribute but do not benefit from the project.
