(Bloomberg) -- Kenya plans to raise as much as 55 billion shillings ($545 million) this fiscal year for an affordable-housing fund through a new tax, helping the state to finance 500,000 new low-income units promised by President Uhuru Kenyatta.

The average cost for each unit will be 2.3 million shillings, Principal Secretary for Housing and Urban Development Charles Hinga said Monday at a forum in the capital, Nairobi.

The government introduced a 1.5 percent tax for both workers and employers in the fiscal year that began in July to fund the housing, which Kenyatta says will be built before his second and final term ends in 2022.

“We will be able to provide long-term mortgage and tenant service schemes, and provide credit with interest rates of 3-5 percent to achieve an affordable housing vision” in which no one spends more than 30 percent of their disposable income on housing, Hinga said.

While 72 percent of all formally employed Kenyans earn between 15,000 shillings and 49,999 shillings a month, only 2 percent of the 50,000 houses built in the country each year are targeted at those on lower incomes, Hinga said.

To contact the reporter on this story: Adelaide Changole in Nairobi at achangole2@bloomberg.net

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Helen Nyambura, Michael Gunn

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