Blow to Kenyans As Court of Appeal Allows Gov’t to Continue Collecting Housing Levy

The Court of Appeal has allowed the government to continue collecting housing levy from salaried Kenyans.

The court will issue further directions on the matter on January 26.

The three-judge bench ordered that the status quo remains until it rules on Attorney General Justin Muturi’s application on collection the controversial levy.

Read: Finance Act: Court Declares Housing Levy Unconstitutional, Discriminatory

Last year, Justices David Majanja, Christine Meoli and Lawrence Mugambi found that Section 84 of the Finance Act amending the Employment Act introducing the Housing Levy was unconstitutional.

The bench ruled that the levy lacked a comprehensive legal framework and was irrational.

It also ruled that the levy violates the principles of taxation and as contained in the Finance Act 2023 is discriminatory and unfair for making distinction between formal and informal sector thus creating unequal and inequitable principles.

Read Also: Kenyans to Pay Housing Levy Until January 2024 – Court

“The levy against persons in formal employment to the exclusion of other non-formal income earners without justification is discriminatory, irrational, arbitrary and against the constitution,” said Justice Majanja.

The petitioners; Busia senator Okiya Omtatah, Azimio la Umoja Coalition and the Law Society of Kenya among others, argued that the law was unconstitutional as there was no concurrence of both Speakers of the National Assembly and Senate.

The petitioners through their lawyers; Otiende Amollo, Okong’o Omogeni, Daniel Maanzo and Omtatah argued that the introduction of the Housing Levy does not exist in law – as it purports to give powers to Kenya Revenue Authority to collect deductions – which is unconstitutional.

Read Also: CS Wahome Instructs Employers to Continue Remitting Housing Levy Contributions

The AG through the solicitor general Shadrack Mose, Prof Githu Muigai, Mahat Somane and Kiragu Kimani told the three-judge bench that the Finance Bill was properly passed by parliament after going through the required stages.

While seeking to have the case dismissed, the solicitor general informed the court that the housing levy was properly discussed within the committees of parliament before the bill was debated by the House.

The AG said the housing levy was introduced by the executive with legitimate expectation that it will help most workers in the country.

The court was further told that contrary to what the petitioners have submitted to the judges, that there was no public participations there is sufficient evidence that stakeholders were invited to participate in the making of finance bill.