Blow to Kenyans as court declines to suspend housing levy

 

Kenyans will continue to pay 1.5 per cent of their gross salary towards housing levy after the High Court on Thursday declined to suspend further implementation of the Affordable Housing Act.

A three-judge bench comprising Justices Olga Sewe, John Chigiti, and Josephine Mong'are declined to issue conservatory orders suspending the housing levy pending the hearing and determination of lawsuits challenging its constitutionality.

The petitioners include Busia Senator Okiya Omtatah and Dr Magare Gikenyi.

"We have no doubt that the affordable housing levy is a matter that has generated a lot of public interest. We are also convinced that the public interest tilts in favour of not granting the order but in prioritising these petitions for hearing and determination," the Judges said.

While dismissing the applications by the petitioners, the Judges agreed with the Attorney General, Ministry of Lands, National Housing Corporation, Kenya Revenue Authority, and Commissioner General that it would be difficult to reverse the effects if the orders were granted because contracts have already been signed and infrastructure projects initiated.

The three-judge bench said the court should be slow in doing so especially in matters involving constitutionality of statutes.

"The petitioners have failed to demonstrate either that the challenged provisions pose a danger to life or threaten the bill of rights to warrant issuance of orders sought," Justice Sewe said.

The Judges however directed the six cases to be heard and determined on priority basis.

"We find that the applicants have not made a case to warrant insurance of conservatory orders. The applications dated April 8 and 22, 2024 are hereby dismissed for want of merit. We direct the matter be prioritised for hearing during this term," the Judges ruled.

Six petitions challenging the Affordable Housing Act were filed in March 2024, terming it discriminatory towards corporations.

The petitions include one filed by 22 senators led by Omtatah, Dr Gikenyi, and seven other human rights defenders.

In their lawsuits, they want the court to stop the implementation of sections of the Affordable Housing Act, of 2024.

The petitioners have challenged a section of the new law that seeks to appoint the Commissioners General of the Kenya Revenue Authority (KRA) as the collector of the housing levy, as well as sections 4 and 5 of the law that impose the levy.

They argue that the Commissioner General of KRA cannot be the collector of housing levy as his responsibilities are strictly restricted to the affairs of the Authority.

“The Commissioner General is not the KRA. It is the Authority, not its Commissioner-General, that, under Section 5 of the KRA Act, is given the mandate to collect and account for revenues in accordance with specified laws,” reads the court documents.

Omtatah maintains that any collection of housing levy must wait for the Board to be operationalized.

"Further, such monies collected outside the law by the Commissioner General will be exposed to theft since it cannot be secured by being lawfully kept in any of the existing funds, including in the Consolidated Fund," he says.

On March 19, President Ruto assented to the Affordable Housing Bill 2023, paving the way for the reinstatement of the contentious housing levy deductions.

The new legislation ropes in workers in the informal sector in order for the regulations to be in agreement with the High Court ruling that rendered it unconstitutional last year.