AG Muturi Warns KRA Against Controversial Housing Levy Deductions

Attorney General Justin Muturi has warned the Kenya Revenue Authority against deducting the controversial housing levy, citing the lack of a legal framework to support the deduction.

In a letter addressed to KRA Commissioner General Humphrey Wattanga, the AG pointed the taxman to the ruling delivered by the court of appeal on January 26, 2024, that upheld a high court decision which declared the Housing Levy unconstitutional.

A three-judge bench had last year ruled in favour of petitions filed before the high court challenging section 84 of the Finance Act 2023, on grounds that the levy was discriminatory and a direct violation of Article 10 of the constitution of Kenya.

“The upshot of this is that there is no legal basis on which the Housing Levy as provided in section 84 of the Finance Act, can be implemented,” Muturi said.

He was responding to a letter from Wattanga dated February 12 seeking guidance on the government’s position on the matter.

“Therefore, our considered opinion is that as of the date of the delivery of the ruling of the Court of Appeal, i.e on January 26, 2024, there is no legal provision that enables the collection and administration of the Housing Levy,” Muturi told Wattanga.

“Kindly be advised.”

The finance bill 2023 was assented to by President William Ruto on June 26, 2023.

MPs on Wednesday last week passed 39 amendments captured in the Affordable Housing Bill, 2023 setting the stage for all Kenyans; both salaried and non-salaried, to contribute 1.5 percent of their income towards the Affordable Housing Fund.

Early this in February, the AG told Parliament to make necessary amendments to the controversial Housing Bill that will benefit common citizens.

Muturi who spoke after appearing before the joint committees of Finance and Planning and Housing and Urban Planning, said the bill also concerns counties contrary to the majority leader Kimani Ichungwa’s assertion.

He assured the committee that all the issues that were raised by the courts in striking out the Housing Levy have been dealt with in the proposed bill, but challenged them to make the bill even better as they have the mandate to do so.

“We are of the view that this bill addresses all the three issues raised by the courts, but like I said these are just proposals and the House has the powers to make further amendments to make the bill even better,” he said.

The Azimio MPs stormed out of the chamber after their amendments were not considered.

Suna East MP and Minority Whip Junet Mohamed accused the government of capturing Parliament to rush and push through the Bill.

“Azimio filed several amendments, some yesterday and some today morning. Unfortunately, it looks like there are some instructions from Kenya Kwanza regime that this bill be passed without amendment,” he said in a press address outside Parliament.