The High Court has granted the government stay orders against its ruling on the 1.5 percent housing levy intended to fund affordable housing, which it found unconstitutional.
The housing levy, imposed as part of a finance law adopted in June, was deemed unconstitutional and discriminatory for targeting employed workers for the deduction, intended to earn the government Kes63.2 billion this year.
Despite opposition from the petitioners and interested parties present in court during the application, the government has been granted a conservatory order of 45 days.
The stay order, issued by a 3-judge bench consisting of Justice David Majanja, Justice Christine Meoli, and Justice Lawrence Mugambi, will be in force until January 10, 2024.
“An order of stay is hereby issued today pending the filing of a formal application for conservatory orders in the Court of Appeal, and these orders shall remain in force until January 10, 2024,” ruled Justice David Majanja.
Regularize housing levy
The government, through their lawyer, Mr. George Murugara, sought the 45-day window to regularize the housing levy as it was declared unconstitutional due to a lack of proper policies necessary for its governance.
“In those 45 days, I urge you to suspend the oppression of those particular findings in the judgment and any decree that may flow therefrom pending the filing of a formal application,” he said.
“This is because, as the Court of Appeal observed in its ruling, a party aggrieved by payment to the government of these levies can actually get rebates for overpaid taxes and levies. So those applications can be made, and monies possibly can be reversed,” Murugara added.
However, the prayers were fiercely opposed by the petitioners, saying a declaration of unconstitutionality could not benefit from a stay order. Moreover, Azimio lawyer Ochieng’ Oginga also said it would be contrary to Article 23(3)(d) for the court to issue an order suspending its judgment on the housing levy being unconstitutional.
The article pertains to the authority of courts to uphold and enforce the Bill of Rights. “To stay the declarations of invalidity would be akin to this court sanctioning a continued violation of the constitution,” Oginga explained.
This means that Kenyans and their employers still have to remit 1.5 percent of their earnings to the housing fund.