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The Kenya Revenue Authority (KRA) collected Sh73.2 billion in housing tax in the financial year 2024/25. This amount surpassed the Sh63.2 billion target that had been set by the National Treasury.
Despite the taxman surpassing the housing tax collections target, a huge amount of the collected funds are yet to be used for the purpose of building affordable houses. As at November 2024, only 16 billion had been used on houses out of the Sh54 billion that had been collected under the controversial tax scheme.
“Housing and Urban Development faced significant challenges in the Affordable Housing sub-programme, with a low absorption rate of 26 percent, reflecting delays in project implementation,” a report from the office of the Controller of Budget Dr. Margaret Nyakang’o stated.
As at April 2024, the department had collected Sh34.72 billion. Out of this, only Sh6.93 billion had been used on the affordable houses project.
As at February 2025, some Sh46 billion collected from this tax have so far been invested in the short term T-Bills. This amount included reinvestments which were equivalent to 51.8 per cent of the Sh88.7 billion that has so far been collected since August 2023 when the controversial tax came into force.
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“It is not prudent even as government to have money seated, lying idle in an account. The money is safe, fully invested in government securities and the accounts we are operating are CBK accounts, which have full sight of the government on every expenditure,” said Affordable Housing Board acting chief executive officer Sheila Waweru.
“We can put the money in Treasury Bills as a manager of the affordable housing fund and it brings additional money, say Sh2 billion, and that enables us to put up more units which we will not do if the cash was staying in an account idly.”
The government under President William Ruto had claimed that it was targeting to build about 250,000 houses per year. However, currently, only about 0.4 per cent of these houses are being built per year.
