Finance Bill 2023: Is Housing A Public Good?

President William Ruto and his administration proposes an introduction of a 3% housing levy on employers and employees to fund an ambitious government plan to build 500,000 affordable housing units in major Kenyan towns. This proposal is a deliberate move by government to participate in the construction business which is one of the most lucrative ventures by private sector players in Kenya. The proposal which is now a contentious subject in the Finance Bill 2023 triggers mixed reactions from the private sector.

Governments are established to provide public goods to the people. They are enabled through collection of taxes from the very people they serve. President Ruto's government is either revising the definition of public goods and taxes by venturing into the construction business with capital from a mandatory housing levy. If the finance bill passes, then Kenyans will have to accept the affordable housing project as a supply of public goods by the government. They will also have to realize that the concept of taxation is evolving to not only fund the supply of public goods by government but also to provide capital for state enterprises.