The Kenya Revenue Authority (KRA) is preparing to intensify enforcement against defaulters of the housing levy following recent legal amendments. Starting July 1, 2026, KRA gained authority to freeze bank accounts, seize assets, and deactivate PINs of individuals and entities that fail to remit the 1.5% housing levy deducted from employees' salaries.
Previously, KRA collected the housing levy but lacked explicit legal powers to pursue defaulters, resulting in widespread evasion. The Finance Act, which took effect in July, closed this loophole and introduced stronger sanctions to ensure compliance.
According to Housing Principal Secretary Charles Hinga, the government expects increased effectiveness from KRA's crackdown. He emphasized that the tax authority had insisted on explicit legal backing before targeting employers who deducted levies but failed to remit them to the government.
In the financial year ending June 2026, the housing levy collection reached KSh 79.9 billion. Enhanced enforcement measures aim to increase revenue and ensure all contributions are properly accounted for.
Background
- The housing levy is set at 1.5% of gross pay or income.
- Collection began in July 2024 but enforcement powers were limited until July 2026.
- The Finance Act 2026 grants KRA authority to take punitive actions against defaulters.
- Penalties include freezing bank accounts, asset seizures, and PIN deactivations.
