In a move that has stirred debate across Kenya, the Ministry of Lands, Public Works, Housing and Urban Development has instructed employers to persist in deducting the Housing levy funds from their employees' salaries. The directive comes on the heels of a High Court ruling that granted a 45-day stay on the termination of the Affordable Housing levy, previously deemed unconstitutional due to its focus on salaried workers alone.
High Court's Stay Order and its Implications
The stay order, handed down by a three-judge bench, affords the government a crucial window to reconfigure its taxation procedures. The levy, a product of the Finance Act, was initiated in July, with the Kenya Revenue Authority (KRA) shouldering the responsibility of its collection. Employers are mandated to remit 1.5% of their payroll in addition to an equal 1.5% from their employees' salaries.
Respect for Judiciary and Societal Implications
President William Ruto, who views the Housing plan as a pivotal element of his administration, has publicly expressed his respect for the court's decision. Yet, he remains mindful of the wider societal implications of the levy and its role in tackling Kenya's housing shortage. Echoing this sentiment, Deputy President Rigathi Gachagua has urged the Judiciary to consider the broader impact of its rulings.
A Controversial Levy and its Future
The Affordable Housing Levy, while controversial, has been upheld by Cabinet Secretary Alice Wahome as a necessary element of the urban development strategy. The next few weeks will be critical as the government scrambles to respond to the court ruling and the nation watches with bated breath. Will the levy continue in its current form, or will it be reshaped to reflect the court's concerns?