Fresh housing levy deductions start in March
A new directive from the Kenya Revenue Authority (KRA) mandates the deduction of the affordable housing levy from March payslips, as outlined in guidelines issued by the tax authority. Effective Tuesday, March 19th, 2024, employers are required to implement deductions by the KRA's directives. This move comes as part of the government's efforts to finance its housing program.
The KRA's public notice stipulates that employers must deduct the affordable housing levy, equivalent to one point five per cent (1.5%) of employees' gross monthly salaries, and remit it alongside the employer's contribution. The due date for remittance is set as the 9th working day of the following month after the gross salary was due or received. This measure aims to ensure timely funding for the government's housing initiatives.
This legislation marks a significant shift, extending the affordable housing levy to workers in the informal sector following a High Court ruling last year that deemed the previous Act unconstitutional. Previously, contributions were limited to salaried employees in the formal sector.
CMA allows electronic IPOs in drive to cut costs and end listing drought
A new directive from the Kenya Revenue Authority (KRA) mandates the deduction of the affordable housing levy from March payslips, as outlined in guidelines issued by the tax authority. Effective Tuesday, March 19th, 2024, employers are required to implement deductions by the KRA's directives. This move comes as part of the government's efforts to finance its housing program.
The KRA's public notice stipulates that employers must deduct the affordable housing levy, equivalent to one point five per cent (1.5%) of employees' gross monthly salaries, and remit it alongside the employer's contribution. The due date for remittance is set as the 9th working day of the following month after the gross salary was due or received. This measure aims to ensure timely funding for the government's housing initiatives.
This legislation marks a significant shift, extending the affordable housing levy to workers in the informal sector following a High Court ruling last year that deemed the previous Act unconstitutional. Previously, contributions were limited to salaried employees in the formal sector. To comply with the new requirements, employers are instructed to declare the levy under sheet "M" of the Pay as You Earn (PAYE) return on iTax and make payments through specified channels such as KRA agent banks or mobile money platforms.
Why KCB dropped NBK after investing Sh14bn
KCB Group has announced its decision to divest from the National Bank of Kenya (NBK) approximately four years after its acquisition, signaling the challenges posed by the loss-making entity to the over a century-old lender. The move comes following deliberations by KCB’s board since September of last year, exploring various options including injecting additional capital into NBK, a strategy employed multiple times previously. However, NBK continued to strain KCB's resources, with Lawrence Kimathi, the finance director at KCB, revealing that approximately Sh14 billion had been invested into NBK since its acquisition by KCB in December 2019.
According to Paul Russo, CEO of KCB Group, sustaining NBK would have necessitated an injection of between Sh5 billion and Sh8 billion in additional funds to meet the Central Bank of Kenya's (CBK) minimum capital requirements and to bolster the operations of the struggling lender. However, with the board observing the diminishing capital ratios of KCB Bank Kenya, which contributes 67.8 percent of the group's profits, they were reluctant to risk breaching CBK ratios by keeping NBK within the fold. The decision reflects a strategic move by KCB Group to safeguard its financial stability and uphold regulatory compliance amidst the challenging economic landscape.
The divestment from NBK marks a significant chapter for both KCB Group and NBK, with the former aiming to streamline its operations for sustainable growth while the latter faces a transition under new ownership.
Kenya Airways, Virgin Atlantic ink codeshare deal
British carrier Virgin Atlantic has inked a codeshare agreement with Kenya Airways (KQ) to expand their reach in the domestic, African and international markets.
The agreement, signed on Thursday, will make it easy for Virgin Atlantic to place its code on Kenya Airways' London flights, providing passengers with seamless access to KQ's extensive network of destinations in Africa and beyond, the two airlines said. A codeshare is a business deal between two or more airlines, which allows them to sell seats on each other’s flights and expand their network. Each airline publishes and markets a flight under its designator and number as part of its schedule.
“Through the synergy of our respective strengths and networks, our goal is to enhance the travel experience for our esteemed customers, providing them with expanded choices, enhanced convenience, and seamless connectivity to vital destinations worldwide,” said KQ’s chief commercial and customer officer Julius Thairu in a statement on Thursday.
KQ has been seeking new partnerships and expanding its wings across its network post Covid-19 pandemic outbreak.
Money constraints stunt subsidized fertiliser uptake
Research conducted by the global agro-research firm Consultative Group on International Agricultural Research (CGIAR) has identified a significant barrier to the government's subsidized fertilizer program: a lack of funds. According to the study, which surveyed a diverse group of farmers, 26 percent reported that they could not take advantage of the discounted fertiliser due to financial constraints. Despite being registered for the programme, many farmers find themselves unable to afford the subsidised input, which is priced at Sh2,500 for a 50-kilogram bag, a substantial reduction from market rates as high as Sh6,500.
Moreover, the research highlights a broader issue of inadequate information dissemination regarding the availability and distribution of subsidised fertiliser. Particularly affecting smallholder farmers, the study revealed that 33.9 percent of respondents were unaware of the existence of the State-backed initiative, while 12.5 percent reported not receiving notifications regarding the fertiliser's procurement locations and schedules. These findings underscore the need for enhanced outreach efforts and targeted communication strategies to ensure that eligible farmers are not only aware of but also able to access the benefits of the government's fertiliser subsidy programme.
WHAT YOU MUST HAVE MISSED
Money constraints stunt subsidized fertiliser uptake
Research conducted by the Consultative Group on International Agricultural Research (CGIAR) has identified a significant barrier to the government's subsidized fertilizer program: a lack of funds. According to the study, which surveyed participants across various agricultural sectors, 26 percent cited insufficient funds as the primary reason for not taking advantage of the discounted farm inputs offered by the government. Despite being aware of and registered for the subsidy program, many farmers find themselves unable to benefit due to financial constraints.Under the subsidy scheme, registered farmers are eligible to purchase a 50-kilogram bag of fertilizer for Sh2,500, a considerable reduction from market prices that can reach as high as Sh6,500.
Customers to remain yoked to Kenya Power despite end of monopoly
Millions of existing Kenya Power customers will be tied to the power utility indefinitely despite the State opening up the electricity distribution market to other firms. The Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2024 have barred the existing Kenya Power customers from decamping to other firms set to enter the electricity distribution space. Energy Cabinet Secretary Davis Chirchir gazetted the regulations last month, as the State moves to end the monopoly that the power distributor has enjoyed for decades.
Kenya needs 3m passports quarterly on labour travels
The State has turned to the National Security Intelligence Service (NIS) to help secure passport printing materials from overseas to clear a backlog of 724,000 applications and new requests. Interior Cabinet Secretary Kithure Kindiki told Parliament the government is facing difficulties sourcing passport printing materials due to worldwide supply chain shortfalls.
“I have assigned the National Intelligence Service (NIS) to support the State Department for Immigration and Registration of Citizens to get us these travel materials,” Prof Kindiki told the Regional Integration Committee. He told Parliament that the Immigration Department requires three million passport booklets every 90 days but suppliers can only provide 1.5 million.