Lobby groups in court to stop gov't from backdating Housing Levy deductions

Lobby groups in court to stop gov't from backdating Housing Levy deductions

A file image of the Milimani Law Courts in Nairobi, where Finance Act ruling was delivered on Monday.

Six Civil Society Organisations (CSOs) have appealed against the government’s decision to backdate Housing Fund taxes proposed in the Finance Act, 2023.

The levy was backdated to July 1 after the Appellate Court temporarily lifted conservatory orders barring the implementation of the contentious Act, paving the way for the government to implement critical taxes that had been put on hold following the Act's suspension late last month.

The petitioners now want the ruling to be halted, arguing that it poses an immediate risk to lives and livelihoods of Kenyans.

"The matter is urgent and requires an August recess hearing because of the intervening threat to lives and livelihoods and due to the retrospective date of 1st July 2023," read the documents in part.

The lobby groups further challenged the Act, noting that it violated Articles 10 and 201 of the Constitution "by imposing retrogressive tax measures which burden low-income earners excessively and threaten their right to life and livelihood under Articles 26 and 43 of the Constitution."

The petitioners include Kenya Human Rights Commission (KHRC), Katiba Institute, The Institute for Social Accountability (TISA), Transparency International Kenya, the International Commission of Jurists - Kenya, Siasa Place and Tribeless Youth.

The National Assembly, Attorney General, are the respondents in the case, with the Law Society of Kenya listed as an interested party.

The Kenya Revenue Authority (KRA), which was appointed as the collection agent, has ordered employers to remit their 1.5 per cent contribution alongside a similar rate for their employees as well.

In a notice on August 4, KRA warned that employers who fail to remit the deductions shall be liable to payment of a penalty equivalent to two per cent of the unpaid funds for every month until they comply with the law.


Citizen TV Citizen Digital Housing Levy Finance Act 2023

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