Court has put a brake into government’s housing levy revenue stream terming it discriminatory and irrational.
- The court said the introduction of the housing levy lacks a comprehensive legal framework in violation of 2010 constitution.
- It found it discriminatory that it targeted only persons in the formal employment in exclusion of other non-informal earners without justification.
- The housing levy is payable by the employee and employer at a rate of one point five per cent of the employee’s gross monthly salary by the employee, and one point five cent of the employee’s gross salary by the employer.
“An order is granted prohibiting the respondents from collecting, charging on otherwise the charge known as the affordable housing act,” said Justice David Majanja.
The government in August backdated the mandatory contribution towards the Housing Fund proposed in the Finance Act, 2023 to July 1.
This was after the Court of Appeal lifted the suspension of the conservatory orders barring the implementation of the contentious Finance Act, 2023.
- The money shall be remitted by the employer not later than nine working days after the end of the month in which the payments are due.
- The Finance Bill 2023 was passed by parliament on June 22, 2023, and later assented by President William Ruto on June 26.
- The High Court later suspended implementation of the act on June 30, after multiple petitions were filed.
The petition by Busia Senator Okiya Omtatah and six others sought to stop the implementation of the Finance Act in its entirety.
They claimed its passage in Parliament was unprocedural, and that it will affect many Kenyans who are already overburdened by the current high cost of living.
The petitioners also sought to have the new law declared unconstitutional arguing that the Finance Act 2023 was illegal because the Bill did not pass through the senate as envisioned by the law.
They argued that there was no concurrence of both Speakers of the National Assembly and Senate on matters relating to counties.