Housing Levy: Human rights groups, LSK move to Court of Appeal to challenge stay order

Human rights groups and the Law Society of Kenya (LSK) will appeal against the High Court decision that allowed the government to continue deducting the unconstitutional housing tax.

The Kenya Human Rights Commission (KHRC), Katiba Institute, International Commission of Jurists and the Institute for Social Accountability are the latest entrants in the case set to be filed at the Court of Appeal, a day after Cabinet and Parliament filed a notice of Appeal, challenging the judgment of the High Court that declared the housing tax unconstitutional.

In what will be a joint suit, the human rights groups want the Court of Appeal to rule that;

1. The High Court erred in law in holding that it has no jurisdiction to examine the hardship caused by taxes, despite the requirement of social justice and fairness in Articles 10, 27, and 201.

2.  The High Court erred in law in holding that money bills can only be introduced and debated in the National Assembly.

3.  The High Court erred in law in finding, contrary to the evidence on record, that public participation on the Finance Act 2023 was meaningful and adequate. The High Court further erred in law in holding that public agencies have no obligation to consider or to demonstrate how they have considered the views received.

4. The High Court erred in law by ignoring known and well-settled fundamental principles of taxation such as fairness. High Court further erred in giving the National Assembly and Executive an absolute power to tax contrary to the Constitution. 

5. The High Court erred in law in denying the Senate's role to debate a Finance Act containing matters concerning counties and the High Court abused its discretion by issuing an unwarranted stay of execution of a judgment finding many portions of an Act unconstitutional. 

LSK President Eric Theuri told Citizen TV that the lawyers’ body will be challenging the Executive and Legislature’s quest to have the decision on the housing tax overturned by the Appellate Court. 

“All petitioners will strongly oppose respondents' attempt to overturn the lower court's finding on the illegality of the Housing Levy. We will also be seeking the abolishment of the 45-day stay order controversially issued by the lower court,” said Theuri.

 The Treasury and National Planning Cabinet Secretary, Attorney General, Speakers of the National Assembly and Senate, as well as KRA Commissioner General, in a joint notice of Appeal against the High Court decision, stated that they will seek to overturn the following parts of the judgment:

1. Section 76, 77 and 78 of the Finance Act, 2023 amending Section 7 of the Kenya Roads Board Act, No. 7 of 1999; Section 87 of the Finance Act, 2023 amending Section 28 of the Unclaimed Financial Assets Act, No. 40 of 2011 and Sections 88 and 89 of the Finance Act, 2023 repealing Section 29 of the Statutory Instruments Act, No. 23 of 2013, are unconstitutional, null and void.
2. Section 84 of the Finance Act, 2023 violates Article 10(2)(b), (c), 27 and 201 of the Constitution and is therefore null and void.
3. An order is hereby granted prohibiting the Respondents from collecting, charging or otherwise, the charge known as affordable housing levy on the basis of Section 84 of the Finance Act, 2023.
4. To the extent that the Court found that it is necessary for the Speaker of the National Assembly to agree with the Speaker of the Senate on the nature of any Bill prior to its introduction in any House.

Parties have 14 days after the High Court's decision to file notices of appeal, after which a date will then be set aside for mention before pre-trial.