BIG BLOW To Ruto As Court of Appeal Halts Housing Levy Deductions

January 26, 2024

It will not be a pleasant weekend for President Ruto and his administration, after the Court of Appeal dismissed a government application to keep collecting the housing levy for the affordable housing programme.

In November last year, a High Court declared the housing levy ‘unconstitutional’, but allowed the government to keep making the deductions until another determination was made.

This morning, a 3-justice bench comprising of Justices Lydia Achode, John Mativo and Mwaniki Gachoka, ruled that the housing levy will continue to remain suspended as declared by the high court. This means that the government cannot legally continue collecting the levy.

The state had a few weeks ago argued that failing to grant orders to stay the High Court decision would lead to chaos, but it appears that argument did not land.

The court further directed that the appeal be heard expeditiously, which may provide yet another lifeline to Ruto before a possible reintroduction of the levy in the next finance bill a few months from now.

Once again, one of the reasons provided by the court is that the levy was only targeting a section of Kenyans. The president has already hinted that this will be cured by incorporating all Kenyans from both formal and informal sector to pay the 1.5%.

In his December interview with various media houses, Ruto said that such a provision would in fact be beneficial, since there will be more money in the pot. That was interpreted to mean that his administration will keep reintroducing the levy until it meets all constitutional requirements.

Parliament is already working on a legal framework for the levy, which would clear a major constitutional hurdle should the government choose to reintroduce it.

The president has meanwhile this month gone on overdrive launching affordable housing projects all around the country.  Just yesterday, he was in Timau to launch a 320-unit project.

It remains unclear what the fate of these projects is, pending a final determination.

As for Kenyans asking for refunds, the court has not pronounced itself on that, and it is highly unlikely that the government has any money to refund anyway.

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