Kenyans to continue paying Housing Levy until January, High Court rules

Salaried Kenyans are set to continue feeling the pinch of taxation after the High Court in Nairobi on Tuesday granted stay orders restraining quashing of the affordable housing levy until January 10, 2024.

This comes after the court declared the levy unconstitutional, ruling that it violates Article 10, 2 (a) of the Constitution.

The stay orders follow a request by the Respondents in the case, led by lawyer George Murugara, for 45 days to comply with the court ruling.

“In those 45 days, I urge you to suspend the oppression of those particular findings in the judgement and any decree that may flow therefrom pending the filing of a formal application under the Mutunga Rules and the Court of Appeal Rules."

“The reason is that, first, we have to make the necessary adjustments to the government procedure of taxation so that no party/arm of government is sued for contempt.”

A three-judge bench composed of Justices David Majanja, Lawrence Mugambi and Christine Meoli also declared sections 84, 72 to 78 of the Finance Act null and void.

"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," Justice Majanja read the judgement.

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.