Revealed: KRA to deduct 1.5% house levy despite court order

Revealed: KRA to deduct 1.5% house levy despite court order

The Kenya Revenue Authority (KRA) could deduct the 1.5% housing levy despite a stoppage order by the Court.

Sources close to the tax collector indicate that there are no plans to make the Finance Act 2023 deduction of 1.5% housing fund from employees stop.

High Court judge Mugure Thande had declined to set aside orders suspending the Finance Act 2023 which plans to deduct 1.5% of employees gross salary to go towards housing fund.

The judge ruled that the petitioners (Busia senator Okiya Omtatah and others) proved that they have a case adding that if the orders were to be lifted the public stands to suffer.

The judge further directed that the file be forwarded to Chief Justice Martha Koome to appoint a three-judge bench who will hear and determine the matter.

However the Kenya Kwanza government has kept the Finance Act 2023 rolling despite the orders by the court barring it from implementation.

The Energy and Petroleum Regulatory Authority (EPRA) for example has refused to revoke the 16% tax despite suspension of the Act by the court.

EPRA stated that the changes follow the adoption of the Finance Bill 2023 which dictates that the Value Added Tax (VAT) on fuel doubles up from 8 to 16 per cent effective July 1, 2023.

The KK government through the National Treasury’s plan to raise more taxes to implement the Sh3.6 trillion budget. 

Teachers Service Commission (TSC) teachers were looking forward for an enhanced perk in their July salaries after the order by the High Court suspending the Finance Act 2023.

The National Treasury already released a total of sh. 9.1 billion to TSC to be used to implement the July payrise plan for over 350,000 teachers and secretariat staff on pnp payroll.

Announcing the salary increment of between 7% to 10% for teachers and civil servants, President William Ruto said this is to cushion public servants from the harsh economic times.

“I know there is a proposal by SRC for the increase of salaries of different cadres of both civil servants and other public servants. So our teachers, policemen, military space, and those working in government, we have agreed that from tomorrow your salaries will be adjusted between 7 and 10 percent,” Ruto said during the launch of the new e-citizen platform at KICC.

In the first financial year (2023-2024) teachers will get a salary increment of 7% then second year (2024-2025) will be 8% then third year (2025-2026) will be 9% and final year (2026-2027) will be 10%.

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