Deduction of house levy to continue vows Ruto after court rule

President William Ruto has vowed to continue with the Housing Levy program despite the Court of Appeal halting it.

Speaking in Meru County on Friday, January 26, the president reiterated that the program will stay on, on the basis that it is creating employment opportunities for Kenyan youth.

“Hii housing mnataka iendelee ama tusimamishe? “I want to tell the few that have gone to court to challenge the Housing Fund that we will go forward with it. They want to deny youths and other Kenyans an opportunity to work for their country but we will not allow it…It will continue,” said Ruto.

 “We are already making the law that the court authorized. We are going forward with creating job opportunities for the people of Kenya,” he continued.

His remarks come hours after the Court of Appeal ruled that the Housing Levy is unconstitutional.

“The trial Court held that the Housing Levy was introduced without a legal framework. It also held that the levy was targeting a section of Kenyans. In our view, the public interest lies in awaiting the determination of the appeal,” reads the ruling in part.

“This is because if the stay sought is granted at this stage, should the appellate Court affirm the impugned decision, then some far-reaching decisions that will have been undertaken under the impugned laws may not be reversible.”

In a decision last year, three judges of the High Court ruled that the introduction of the Housing Levy through amendment of the Employment Act by Section 84 of the Finance Act, 2023 lacks a comprehensive legal framework in violation of Articles 10, 201, 206 and 210 of the Constitution.

Justices David Majanja, Christine Meoli and Lawrence Mugambi further stated that the imposition of the housing levy against persons in formal employment to the exclusion of other non- formal income earners to support the national housing policy is without justification is unfair, discriminatory, and irrational.

The appellate court said in the ruling that the question that begs an answer is whether in the circumstances of the case, it would be in the public interest to grant a stay whose effect is to allow a statute that is constitutionally illegal to continue being in the law books pending the hearing of an appeal.

“We do not think so. This is because should the Court hearing the appeal affirm the constitutional invalidity of the impugned laws, then all actions that will have been undertaken under the impugned sections of the law during the intervening period will be legally frail,” said the judges.

On January 4, the Court of Appeal allowed the government to continue collecting the controversial housing levy until today’s court ruling to decide whether to lift the order or grant a further extension.

A three-judge bench ordered that the status quo be maintained until it rules on Attorney General Justin Muturi’s application seeking to continue collecting the levy pending the determination of an appeal on its legality.

A day before the hearing of the application, President Ruto complained that his plans were being sabotaged through court orders.

He vowed to disobey the orders and implement the projects.
Mr Muturi had pleaded with the court to allow the collection of the levy arguing that it had created more than 120,000 jobs since it was started six months ago.

Early this week, the Federation of Kenya Employers (FKE) has poked holes into President Ruto’s affordable housing programme, warning that it risks hurting the already overburdened taxpayer.

The employers’ lobby, in its memorandum on the Affordable Housing Bill, 2023 presented on Tuesday to the National Assembly committee on Housing, termed the 1.5 per cent deduction from employees’ salaries towards the programme an extra burden for workers.