State gets nod to keep collecting housing levy
The Court of Appeal has directed the preservation of the current state of affairs regarding the collection of the housing levy. This implies that Kenyans will continue making payments for the fees until a final decision is issued by the judges on January 28th.
“In the meantime, the status quo obtaining as of today shall be maintained until the delivery of the ruling,” Court of Appeal judges Lydia Achode, John Mativo, and Mwaniki Gachoka said on Thursday.
In November 2022, the High Court ruled the 1.5 per cent levy, designed to finance affordable housing and implemented through a finance law in June, as unconstitutional.
“The introduction of the housing levy… is discriminatory and irrational and arbitrary and is in violation… of the constitution,” High Court Judge David Majanja said in November.
However, the court temporarily suspended the decision for 45 days until January 10, providing a window for the government to file an appeal and address the judges’ concerns.
Read also: Court grants govt 45 days to rescue Kes63 billion Housing Levy
Levy discriminatory
The High Court noted that Section 48 of the Finance Act 2023, which introduces the housing levy for formally employed individuals, breaches the principle of taxation by creating an unwarranted distinction between those employed in the formal and informal sectors.
The three-judge bench further stated that the government did not offer a reasonable justification for imposing the levy, rendering the legislation arbitrary and discriminatory.
The government contended that the housing levy is critical in facilitating affordable housing for citizens and appealed to the High Court to review its decision.
Following the High Court’s verdict, President William Ruto expressed that the law deliberately focuses on the housing sector to generate job opportunities for Kenyans, particularly the youth, as part of his administration’s plans to tackle joblessness. President Ruto added that the government would make appropriate modifications to the supporting law in accordance with the court’s guidance.
