Blow To Gov’t As Court Of Appeal Declines To Lift Orders Suspending Housing Levy

Written by on 26 January 2024

The Court of Appeal has declined to suspend the High Court order that declared the housing levy as unconstitutional.

In a ruling delivered on Friday, Appellate Court judges Lydia Achode, John Mativo and Paul Gachoka cited public interest in the matter, underscoring the High Court ruling that the Housing Levy was introduced without a legal framework.

“The trial Court held that the Housing Levy was introduced without a legal framework. It also held that the levy was targeting a section of Kenyans. In our view, public interest lies in awaiting the determination of the appeal. This is because if the stay sought is granted at this stage, should the appellate Court affirm the impugned decision, then some far-reaching decisions that will have been undertaken pursuant to the impugned laws may not be reversible,” reads the court ruling in part.

The judges added, “Public interest in our view awaiting the determination of the issues raised in the intended appeals.”

In November last year, the High Court judge ruled that  petitions filed challenging the Finance Act 2023 violated Article 10, 2 (a) of the constitution.

“We find that the introduction of the housing levy amendment to section 84 lacks a comprehensive legal framework in violation of Article 10 of the constitution, that levy against persons in formal employment without justification is discriminatory and irrational,” Majanja read in his judgement on behalf of a three-judge bench.

The other two judges included Lawrence Mugambi and Christine Meoli.

The Levy, a cardinal pillar in the Finance Act, started being deducted from formally employed Kenyans in July, with the Kenya Revenue Authority (KRA) mandated as the collecting agent.

Employers have been remitting their 1.5 percent contribution alongside a similar rate for their employees as well.

Government had cited that the unwelcome deduction would enable them achieve their ambitious plan of constructing affordable homes for low-earning Kenyans.

The Finance Bill 2023 was passed by parliament on June 22, 2023, and later assented by President William Ruto on June 26. 

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