Kenyans To Continue Paying Housing Levy- Court Rules

The Court of Appeal has ruled that Kenyans will continue paying the 1.5 per cent Housing Levy until it issues its verdict on the matter on January 26, 2024.

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.

"Upon hearing the parties, all the applications are consolidated as they arise from the same judgment of the High Court dated November 28, 2023. Civil Application No. E577/2023 is designated as the lead file. The ruling on these consolidated applications will be delivered on January 26, 2024," read the ruling in part by the Appellate court's three-judge bench.

An illustration of the Affordable Housing Programme by Boma Yangu Initiative under the National Housing Corporation. /BOMA YANGU KENYA

"In the meantime, the status quo obtained as of today shall be maintained until the delivery of the ruling. Made at Nairobi January 3, 2024."

The bench consisted of Justice Lydia Achode, John Mativo and Paul Gachoka.

The ruling added that the status quo prevails regarding the Housing Levy, meaning Kenyans will continue paying 1.5% of their gross monthly salary matched by 1.5% by the employer.

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.

Notably, the government through the leader of the Majority Kimani Ichung'wah tabled the Affordable Housing Bill which also proposes deductions of 1.5 per cent for Kenyans without formal employment.

However, the progress of the bill is likely to be affected by messy court battles after the Vihiga High Court in December 2023 halted the public participation process until the matter is heard and determined. Kenyans were expected to give their views on the Bill by December 28, 2023.

"We know what we must do but we cannot gather the courage to do it, but this time round, whatever it takes we are going to implement it."

I'm telling you, this time round, I'm implementing the Housing Levy- President Ruto#ViralVideos pic.twitter.com/NcdDCn6cTL — Viral Tea Ke (@ViralTeaKe) December 13, 2023