Ruto Clarifies Housing Levy Deductions, Points to 10% Wage Increase

Ruto Clarifies Housing Levy Deductions, Points to 10% Wage Increase

President William Ruto has defended the continued deduction of the 1.5% Affordable Housing Levy, arguing that workers should consider the contribution alongside the 10% increase in the minimum wage introduced earlier this year.

Ruto made the remarks on Saturday, August 29, while speaking at Eldoret State Lodge in Uasin Gishu County, where he defended the government’s Affordable Housing Programme amid continued criticism from opposition leaders and some members of the public.

The President argued that the housing levy should not be viewed in isolation because workers had also benefited from a higher minimum wage.

“If you are told to give 1.5% yet your salary has been raised by 10%, what loss is there? You have not suffered any loss,” Ruto said.

The President’s remarks come as the Affordable Housing Levy remains a major political and economic issue in Kenya. Critics have questioned the deductions, particularly for salaried workers who contribute to the programme through payroll deductions.

Ruto Defends Affordable Housing Programme

Ruto maintained that the Affordable Housing Programme was designed to create employment opportunities while addressing Kenya’s housing shortage.

He said the debate should also consider Kenyans who do not receive formal salaries or payslips and may not benefit from traditional employment opportunities.

“At least they are talking about those who have payslips; what about those who do not have payslips? Who will talk on their behalf?” he posed.

The President further linked the housing programme to employment opportunities for young Kenyans involved in construction and related industries.

“If you abolish the programme, where will you take the millions of youths working in the Affordable Housing Programme?” Ruto asked.

According to the President, scrapping the programme would affect not only housing development but also thousands of jobs created through construction projects across the country.

10% Minimum Wage Increase

Ruto’s defence of the levy comes after the government introduced a 10% increase in the minimum wage for workers.

The new wage rates took effect on June 26, 2026, following a gazette notice issued by the Labour Ministry. The increase followed a directive by Ruto on May 1, 2026, requiring new minimum wage rates to be gazetted for different categories of workers.

The government has argued that the wage increase was intended to improve workers’ earnings amid rising living costs.

Ruto now says the increase should be considered when assessing the financial impact of the housing levy.

Housing Levy Faces Continued Opposition

The Affordable Housing Levy was initially introduced in 2023 through the Finance Act, 2023. The levy was later challenged in court, with the courts declaring the initial framework unconstitutional.

The government subsequently introduced a new legal framework through the Affordable Housing Act, 2024, allowing the housing contribution to continue.

Under the current arrangement, employees contribute 1.5% of their gross monthly salary, while employers make a matching contribution.

Despite the government’s defence, the levy continues to attract criticism from sections of the public and opposition leaders.

Some critics argue that workers should not be compelled to finance a housing programme from their salaries, particularly where they may not eventually qualify for or benefit directly from the houses being constructed.

The debate is expected to remain a major issue as the government continues expanding affordable housing projects across the country.

Ruto, however, has maintained that the programme serves a wider national purpose by creating jobs, increasing access to housing and providing opportunities for Kenyans outside the formal employment sector.

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Ruto Clarifies Housing Levy Deductions, Points to 10% Wage Increase