Win for Salaried Kenyans as Court of Appeal Declares Housing Levy Unconstitutional

The Court of Appeal on Friday declared the Housing Levy unconstitutional.

The appellate court dismissed the State’s applications seeking a stay of execution for the judgment that found the Housing Levy to be unconstitutional.

The judges; Lydia Achode, John Mativo and Mwaniki Gachoka, said that if they affirm the constitutional invalidity of the challenged laws, then some far-reaching decisions that will have been undertaken may not be reversed.

Additionally, it terminated the deduction of charges following the government’s window of opportunity to collect the funds, which closed on January 26.

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

The judges contended that it would be unfair to deduct the monies because they could not foretell how the case would turn out.

Refunding the money, the court observed, would complicate the case if it was determined to be unconstitutional.

It was also found that the Housing Levy only applied to salaried Kenyans—a procedure the court believed was unjust.

“The trial Court held that the Housing Levy was introduced without a legal framework. It also held that the levy was targeting a section of Kenyans. In our view, public interest lies in awaiting the determination of the appeal,” the bench ruled.

“This is because if the stay sought is granted at this stage, should the appellate Court affirm the impugned decision, then some far-reaching decisions that will have been undertaken pursuant to the impugned laws may not be reversible. Public interest in our view tilts favour of in not granting the stay or the suspension sought. Public interest tilts in favour awaiting the determination of the issues raised in the intended appeals.”

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

In order to address the issues presented in the appeals, the judges further mandated that four merged appeals be addressed as soon as feasible.

On January 3, 2024, the appellate court upheld the status quo.

The High Court ruled on November 28, 2023, that the housing levy was unlawful because only Kenyans in official employment were remitting the monies.

It did, however, issued stay orders on the decision until January 10, 2024.