CONTROVERSIAL TAX

Court rejects state-Cotu pact on housing levy deal

Judge declines to adopt contested consent, orders parties to agree before returning to court

In Summary

• Attorney General wanted mention date for the case be brought forward to adopt a consent already filed in court.

• But FKE and Cofek say they were not consulted on consent pushed by state and Cotu.

COTU sec.gen. Francis Atwoli
COTU sec.gen. Francis Atwoli
Image: FILE

The housing levy fund has hit a rock after the High Court rejected withdrawal of a case opposing the government plan.

The High Court declined to allow consent between Cotu and the state after interested parties contended they had not been consulted.

In a letter dated April 16 addressed to the Employment and Labour Relations Court, the Attorney General asked that the mention date for the case be brought forward to adopt a consent already filed in court.

Through urgent phone calls, the parties were summoned for early mention yesterday to expedite the hearing and determination of the case.

The parties only learnt of the consent and intention to adopt it in court. They vehemently disowned the document insisting that they had no intentions whatsoever of withdrawing the case.

The Federation of Kenyan Employers and Consumers Federation of Kenya both who had made applications to be joined in a case filed by Cotu asserted that they had not been consulted before the consent was filed.

The consent purports that Cotu, FKE and Cofek had agreed with the Ministry of Transport to withdraw a case challenging implementation of the 1.5 per cent housing levy.

FKE through their lawyer Jacqueline Mugo said they were willing to take up the case if Cotu wanted to opt out.

“FKE shall go on record as petitioners in the case if Cotu wants to withdraw,” she told court.

Justice Maureen Onyango declined to adopt the contested consent and instead ordered that the parties involved agree on the matter before they come back to court for the mention.

She also extended the orders suspending implementation of the deduction of 1.5 per cent workers' salaries pending the initially set date of May 20, 2019 for mention of the case.

Cotu requested to be given time to consult further on coming up with another consent as they termed yesterday's mention an ambush.

In an application the involved parties termed the housing levy illegal, unconstitutional, discriminatory, oppressive, irrational and without basis.

On April 17, Cofek through lawyer Henry Kurauka said the levy is not a priority for Kenyans as there are more pressing issues like 13 counties ravaged by hunger and farmers unable to obtain farm input in time.

Kurauka argued that the scheme does not guarantee that all contributors under the scheme would get houses after investing their money.

“It is unreasonable to compel a citizen who will not secure a house to contribute towards house ownership of another person without corresponding benefit,” he said.