The Court of Appeal has denied the government’s request to extend the order allowing the continued collection of the controversial housing levy.
In a ruling delivered on Friday January 26, Justices Lydia Achode, John Mativo, and Mwaniki Gachoka said they declined to extend the order due to public interest, underscoring the High Court ruling which deemed the levy illegal.
“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,” said the court ruling.
Originally incorporated into the Finance Act of 2023, the housing levy aimed at financing affordable housing initiatives by imposing a 1.5% levy on employed Kenyans.
From July, employers have been remitting 1.5% contribution alongside a similar rate for their employees, with the Kenya Revenue Authority mandated as the collecting agent.
In 2023, a trio of High Court judges, including David Majanja, Christine Meoli, and Lawrence Mugambi, declared the introduction of the Housing Levy, executed through an amendment to the Employment Act via Section 84 of the Finance Act, 2023, as lacking a comprehensive legal foundation. This was deemed a violation of key constitutional articles.
The judges further contended that imposing the housing levy solely on formal employment, excluding non-formal income earners, to support the national housing policy is unjust, discriminatory, and irrational.
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