Home Politics High Court suspends quashing of Housing Levy until January 2024

High Court suspends quashing of Housing Levy until January 2024

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High Court suspends quashing of Housing Levy until January 2024

 

The High Court has issued stay orders suspending the quashing of the implementation of the Finance Act 2023, which introduced the controversial Housing Levy. The stay orders will remain in effect until January 2024, when the court will hear and determine the case challenging the constitutionality of the levy.

 

The Housing Levy is a tax that requires employers and employees to contribute 1.5% each of the gross monthly salary to the National Housing Development Fund. The levy is meant to finance the government’s affordable housing agenda, which aims to build 2 million low-cost units by 2030.

 

The levy was initially proposed to be 3% of the basic monthly salary capped at Kshs 5,000, but the National Assembly Finance Committee amended it to 1.5% of the gross salary with no cap. The levy was supposed to take effect from July 2023, but it was delayed until January 2024 due to legal challenges and public outcry.

 

The legality of the levy was challenged by various petitioners, including trade unions, civil society groups, and individual taxpayers. They argued that the levy violated the Constitution, the principles of taxation, and the rights of workers. They also claimed that the levy was enacted without the concurrence of the Senate and without adequate public participation.

 

On November 23, 2023, a three-judge bench comprising Justices David Majanja, Christine Meoli and Larwrence Mugambi ruled that the levy was unconstitutional, null and void. They quashed the implementation of the levy and ordered the government to refund any contributions made to the fund.

 

However, on November 27, 2023, the Attorney General filed an appeal against the ruling and sought stay orders to prevent the quashing of the levy. The AG argued that the ruling would have adverse effects on the government’s budget and development agenda. He also said that the ruling was erroneous and contrary to the law.

 

The High Court granted the stay orders and suspended the quashing of the levy until January 2024, when the appeal will be heard and determined. The court also directed the parties to file and serve their submissions within 14 days.

 

The stay orders have been met with mixed reactions. Some people have welcomed them as a relief for the government and a chance to resolve the dispute amicably. Others have criticized them as a setback for the taxpayers and a delay of justice.

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