The High Court has suspended the implementation of the 1.5 percent housing levy proposed by the government until 10th June when the case will be heard.
Lady Justice Maurine Onyango also consolidated the petitions that were seeking to have the housing levy quashed.
Various parties, including the Central Organization of Trade Unions (COTU), Trade Union Congress of Kenya, Consumers Federation of Kenya (Cofek) and the Federation of Kenyan Employers (FKE) had filed suits challenging the levy.
The parties had argued that the government had not involved them in the implementation while others argued that it amounted to double taxation.
Get breaking news on your Mobile as-it-happens. SMS ‘NEWS’ to 22163
Cofek while objection the move in a suit filed before High court argued that there were more pressing issues in the country like health, food security and unemployment that need more attention than the levy.
It claims new levy will not guarantee houses for those who remit.
Cofek further says the levy may lead to unemployment as many employers may opt to reduce their workers.
Federation of Kenya Employers had also objected the implementation of the levy.
“The Federation of Kenya Employers (FKE) attended Court on the 8th of April 2019 for the further mention of this case and obtained an extension of the Court Orders suspending the implementation of the Housing Levy upto the 20th of May 2019 when the case will come up again for mention for further directions from the Court on the Hearing and determination of this case.” said FKE CEO, Jacqueline Mugo.
The government was to start deducting the mandatory 1.5 per cent housing levy from all employees’ monthly basic salary effective April, 2019.
Under the scheme, both the employer and employee shall each contribute 1.5 per cent of the monthly basic salary.
However, the sum of the total monthly contributions shall not exceed 5,000 shillings.
The government says voluntary contribution may also be made to the scheme at a minimum of 200 shillings per month. The deduction became law by the enactment of the Finance Act, 2018 relating to housing fund levy.
The housing project is one of the four pillars of President Uhuru Kenyatta’s Big Four agenda.
