Gov’t to continue deducting Housing levy funds - CS Alice Wahome

According to a statement from Ministry of Lands, Public Works, Housing and Urban Development Cabinet Secretary Alice Wahome, all employers have been directed to continue deducting the levy till the set date.

This follows a ruling by the High Court on Tuesday which granted stay orders restraining the quashing of the affordable housing levy until January 10.

The ruling made by a three-judge bench composed of Justices David Majanja, Lawrence Mugambi and Christine Meoli declared the levy as unconstitutional as it only targeted salaried workers and the government was therefore granted a 45-day stay.

The respondents, led by lawyer George Murugara, argued that the plea for the stay orders would allow the government to put their house in order. 

“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," Murugara told the court.

The levy, a cardinal pillar in the Finance Act, started being deducted from formally employed Kenyans in July, with the Kenya Revenue Authority (KRA) mandated as the collecting agent.

CS Wahome now says that employers will continue remitting their 1.5 per cent contribution alongside a similar rate for their employees.

The High Court decision came as an unexpected stumbling block for President William Ruto as he has declared the Housing plan as a cardinal pillar for his administration.

Ruto welcomed the decision, promising that he will respect the court's decision.

Deputy President Rigathi Gachagua has also urged the Judiciary to consider the broader societal impact of its decision, arguing that the levy is enabling the government to build houses en masse in order to alleviate Kenya's housing shortage.