KRA Cracks Down on Unremitted Housing Levy: BOM Teachers Facing Salary Adjustments

The Kenya Revenue Authority (KRA) has intensified efforts to collect the 1.5% housing levy from Board of Management (BOM) teachers and support staff. The tax collector is targeting both primary and secondary school principals and headteachers who have failed to remit the monthly levy from the gross income of BOM employees.

KRA is now urging school heads to ensure the deduction of 1.5% from the gross income of BOM teachers and support staff each month. The tax authority has further demanded that those who have not paid the levy face deductions from their salaries to cover arrears for July, August, September, and October.

In notices issued to schools, KRA explicitly states that the 1.5% levy should be deducted from secondary school BOM employees and employers’ gross income, effective from July 1, 2023. The levy is meant to be deducted by employers from employees’ gross salaries and then remitted to KRA, along with the employers’ contribution.

This move comes in the wake of the Finance Act, which mandates all employees to contribute 1.5% of their gross income towards the housing fund. Employers are also obligated to remit the same percentage to support their employees.

BOM teachers, who often support the workload in schools alongside TSC teachers, now find themselves subject to these housing levy deductions. Many schools rely on BOM teachers for additional support due to the acute teacher shortage, and this new development may impact this category of employees.

Starting in January, when schools reopen, these changes may come into effect for BOM teachers, who are usually paid casually without formal payslips. The challenge lies in schools ensuring the proper deduction of the levy and remitting the required funds to KRA.

KRA has issued warnings of consequences should school heads continue paying their staff without deducting and remitting the housing tax. This crackdown signifies a concerted effort by the tax authority to enforce compliance with the housing levy regulations, affecting a significant portion of the education sector’s workforce.

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