Auditor General Nancy Gathungu has poked holes in President William Ruto's most defended levies, with a series of reports that discredit how the Affordable Housing Levy and the Social Health Insurance Fund (SHIF) are collected, spent and accounted for.

According to The Eastleigh Voice, Gathungu told the National Assembly Finance Committee that her office had flagged major risks in Ruto's Bottom-Up Economic Transformation Agenda, including the housing program that is funded by the housing levy.

According to http://Kenyans.co.ke, appearing before lawmakers scrutinising the Finance Bill 2026, Gathungu revealed that the Kenya Revenue Authority failed to onboard all eligible taxpayers onto the Affordable Housing Obligation platform, creating loopholes that undermined collection.

According to http://Kenyans.co.ke, the Affordable Housing Levy is deducted at 1.5% from employees and matched by 1.5% from employers, but KRA's failure to register all eligible persons means salaried Kenyans on payroll are overburdened while informal and other taxpayers escape.

According to The Eastleigh Voice, the revelation came as government seeks to increase revenue for the 2026/27 financial year, but the Auditor warned lawmakers against relying on overly optimistic revenue projections without first fixing leakages in the tax system.

According to The Eastleigh Voice, she further warned that the Sh2.724 trillion revenue debt owed to KRA is equivalent to 112% of total revenue collected in 2024/2025, showing KRA is struggling to collect even existing taxes before introducing new ones.

According to the official Auditor General's summary report for counties, the payroll review for the year ending June 2024 found 22,893 employees in 38 counties earned less than a third of their basic pay, a sharp rise from 10,518 the previous year.

According to the official report and The Eastleigh Voice, management attributed the shortfall to new deductions under SHIF, NSSF and housing levies, but the report notes this violates Section 19(3) of the Employment Act, 2007 which states deductions shall not exceed two-thirds of wages.

According to the OAG Kenya summary, in 29 County Assemblies alone, 1,421 employees received net salaries less than a third of basic pay because of SHIF, NSSF and Housing Levy, making their payslips illegal.

According to Citizen Digital, a special audit established that no formal cost-benefit analysis or project appraisal framework was documented prior to launching the housing programme, and no affordability threshold analysis was provided.

According to The Eastleigh Voice, the Auditor flagged that the programme may be unable to achieve the target of 200,000 units per year, delaying the realisation of the housing agenda and its contribution to economic transformation.

According to Daily Nation, Auditor General Gathungu says she can't trace Sh19.6 billion affordable housing loan from the World Bank's International Bank for Reconstruction and Development given to Kenya Mortgage Refinance Company (KMRC).

According to Daily Nation and The Eastleigh Voice, accuracy and appropriate utilisation of Sh11.66 billion disbursed to KMRC could not be confirmed, because KMRC's financial statements are not audited by her office as required by Public Audit Act, 2015.

According to Citizen Digital and LinkedIn analysis of the audit, out of 394 housing projects audited, 269 lacked verifiable land documentation and only 48 had title deeds at audit stage, meaning houses are being built on land government cannot prove it owns.

WHAT THIS MEANS:

This means three things for every worker. One, you are paying a levy that KRA cannot fully account for. Two, your payslip is being pushed into illegality, making you unbankable and unable to get loans because banks require 1/3 rule. Three, the houses your money builds have no title deeds and no feasibility study, and Sh19.6B World Bank loan cannot be traced.

According to African Tax Administration Forum data cited by Gathungu, tax expenditures of Sh393.13 billion in 2022, Sh368.4 billion in 2023 and Sh286.5 billion in 2024 have not produced clear gains in investment or jobs.

If Treasury Cabinet Secretary John Mbadi admits housing levy and SHIF money does not go to Consolidated Fund where Controller of Budget tracks it easily, but goes to special funds, who watches the watchman?

DEBATE QUESTION

Now that Auditor General says KRA failed to onboard taxpayers, salaries are illegal below 1/3, and Sh19.6B housing loan cannot be traced, do you think Housing Levy and SHIF should continue, be paused for a full forensic audit, or be scrapped completely? Share your payslip experience.