The Auditor-General has flagged major gaps in the collection of the Affordable Housing Levy, revealing that the Kenya Revenue Authority (KRA) failed to onboard eligible taxpayers onto the levy platform, leading to under-collection of revenue.

🇰🇪 Breaking It Down

Appearing before the National Assembly Departmental Committee on Finance and National Planning on Tuesday, Auditor-General Nancy Gathungu outlined a series of weaknesses in KRA's revenue collection systems as lawmakers scrutinised the Finance Bill, 2026.

Among the concerns raised was the implementation of the Affordable Housing Programme, one of the government's flagship initiatives under the Bottom-Up Economic Transformation Agenda (BETA).

According to Gathungu, KRA failed to register all eligible taxpayers on the Affordable Housing Obligation platform, creating loopholes that undermined the collection of the levy.

📌 What You Need to Know

The revelation comes at a time when the government is seeking to increase revenue collections to support ambitious spending plans in the 2026/27 financial year.

The Affordable Housing Levy, which is deducted from employees' and matched by employers, was introduced to help finance the government's affordable housing programme and related infrastructure projects.

However, the Auditor-General's findings suggest that weaknesses in implementation may have prevented the government from collecting all the revenue it was entitled to receive .

The issue formed part of a wider audit that pinpointed several challenges within KRA's tax administration system, including revenue leakages, outstanding tax debt, and compliance failures.

Gathungu warned lawmakers against relying on overly optimistic revenue projections without first addressing inefficiencies within the country's tax collection framework.

"The trend in revenue shortfall raises major concerns about the accuracy of revenue projections in the national budget," the Auditor-General told the committee.

📰 Source: Kenyans.co.ke