Blow For Ruto As Court Of Appeal Stops Housing Levy Deductions
The Housing Levy therefore remains suspended as declared by the High Court
The Court of Appeal has handed a huge blow to President William Ruto by refusing to suspend orders barring the state from deducting housing levy from Kenyans.
The Housing Levy therefore remains suspended as declared by the High Court, whose ruling was upheld by the three-judge bench of Justices Lydia Achode, John Mativo and Mwaniki Gachoka on Friday, January 26.
The appellate Judges stated 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.
They said it is in the public interest that the appeals first be heard.
An illustration of the Affordable Housing Programme by Boma Yangu Initiative under the National Housing Corporation. /BOMA YANGU KENYA
"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.
"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," the ruling sent to newsrooms read in part.
The judges thus ordered four consolidated appeals to be heard as soon as possible to allow issues raised in the appeals to be resolved.
The ruling upholds one from the High Court which declared the Housing Levy unconstitutional. It also brings to an end the deduction of the charges after the window granted to the government to collect the money expired on Friday.
The judges had also argued that it would be unfair to deduct the money as it could not predict how its final verdict. If found unconstitutional, the process of refunding the amount of money would complicate the case.
This ruling represents a major victory for Kenyan workers and a setback for the government's plans to fund affordable housing initiatives. While this ruling represents a pivotal point with the current decision, the outcome of the Housing Levy saga is yet to be determined.
Earlier in January, the Appellate Court allowed the government to continue deducting 1.5 per cent from Kenyans' salaries in the form of the Housing Levy until its verdict on January 26.
The ruling was made after it heard an appeal by the National Assembly and the Speaker of the National Assembly Moses Wetangula on the matter which was challenged by up to 56 parties, including Busia Senator, Okiya Omtatah.
Before it was declared unconstitutional by the High Court, the controversial housing development levy contained in the Finance Act, 2023 was fiercely opposed to the point that the government struggled severally to explain why it was deducting 1.5 per cent from all salaried Kenyans in support of President Ruto's Affordable Housing Programme.
Employees began being charged a 1.5 per cent tax on their gross salary starting July 2023, with employers expected to match the 1.5 per cent housing deduction with proceeds going towards the National Housing Development Fund (NHDF).
The government expressed commitment to turn the housing challenge into an economic opportunity to create quality jobs.
This will be achieved through facilitating the delivery of 250,000 houses per annum and enabling affordable housing mortgages for low-income Kenyans living in urban areas who dreamed of owning a home.
Despite Ruto's complaints, the Housing Levy was nullified by the High Court following a ruling in response to a suit filed by Busia Senator Okiya Omtatah.
The court however granted the government's plea for a 45-day conservatory order regarding the Housing Levy until January 10, 2024, while it rushed to the Court of Appeal to contest the ruling.