Salaried Kenyans will continue to feel the pinch of taxation after the High Court in Nairobi granted stay orders on Tuesday hindering the abolition of the affordable housing levy until January 10, 2024.
This comes after the court declared the levy unconstitutional, ruling that it violates Article 10, 2 (a) of the Constitution.
The stay orders are the result of a request by the Respondents in the case, led by lawyer George Murugara, for 45 days to comply with the court ruling.
“In those 45 days, I urge you to suspend the oppression of those particular findings in the judgement and any decree that may flow therefrom pending the filing of a formal application under the Mutunga Rules and the Court of Appeal Rules.”
“The reason is that, first, we have to make the necessary adjustments to the government procedure of taxation so that no party/arm of government is sued for contempt.”
Sections 84, 72 to 78 of the Finance Act were also declared null and void by a three-judge bench comprised of Justices David Majanja, Lawrence Mugambi, and Christine Meoli.
“We find that the introduction of the housing levy amendment to section 84 lacks a comprehensive legal framework in violation of Article 10 of the constitution, that levy against persons in formal employment without justification is discriminatory and irrational,” Justice Majanja read the judgement.
The levy, a key pillar of the Finance Act, began being deducted from formally employed Kenyans in July, with the Kenya Revenue Authority (KRA) acting as the collecting agent.
Employers have been remitting their 1.5 percent contribution, as well as a similar rate for their employees.
The government claimed that the unwelcome deduction would allow them to carry out their ambitious plan of building affordable homes for low-income Kenyans.
