The government will start deducting 1.5 per cent housing levy from all employees effective this month.

The first contribution will be due by May 9, 2019, Ministry of Housing and Urban Development said on Tuesday.

The ministry in a statement instructed employers to remit to the housing levy fund by May 9.

¬†“…provided that the sum of the total monthly contributions shall not exceed Sh5,000. Voluntary contributions may also be made to the scheme at a minimum of Sh2,000 per month,” the ministry said.

The employers are required to deduct and remit the levy together with other statutory levies from both the employer and the employee by 9th of each succeeding month.

This should be done together with other payroll statutory deductions, they noted.

The housing fund shall be used to finance the affordable housing scheme under the big four agenda.

This comes months after the court temporarily suspended the implementation of the deduction of 1.5 per cent Housing Development Levy on workers’ salaries pending the hearing and determination of a case filed by Cotu.

Justice Hellen Wasilwa  issued the interim orders suspending Section 31A of the Employment Act as amended by Section 86 of the Finance Act 2018.

Cotu contested the implementation of the levy saying it’s unconstitutional and amounts to double taxation.