President William Ruto has given the clearest indication that the government will not let go of the 1.5 per cent housing levy even after the High Court on Tuesday declared the tax unconstitutional.
A three-judge bench struck down the levy but stayed the orders until January 10, 2024, on the prayers of the State's legal team led by lawyer George Murugara.
In his reaction to the ruling hours later, Ruto said the government will respect the court's verdict as it moves to make the appropriate adjustments to the aspects of the law found wanting by the court.
"I know the courts have said we should go and re-adjust the law to make it aligned appropriately, that we are going to do," he said.
The President noted that the affordable housing programme was critical for the creation of employment opportunities for the youth whose targeted employment capacity is expected to hit 500,000 jobs by 2027.
He said so far, the housing project has already created 120,000 jobs for the youth who form a critical clog in the country's economic matrix.
"If we don't engage these people (youth) in productive work, they will become a very big challenge to all of us," Ruto said.
The Head of State was speaking during the 5th Congress of the International Trade Union Confederation-Africa at Safari Park Hotel, Nairobi.
While delivering their verdict on the Finance Act, Justices David Majanja, Lawrence Mugambi and Christine Meoli declared sections 84, 72 to 78 of the Act null and void.
They said the introduction of the housing levy is discriminatory, irrational, arbitrary and in violation of the Constitution.
"We find that the introduction of the housing levy amendment to section 84 lacks a comprehensive legal framework in violation of Article 10 of the Constitution, that levy against persons in formal employment without justification is discriminatory and irrational," Justice Majanja said.
But lawyer Murugara and the team acting for the State in the matter prayed for a 45-day grace period prior to the orders taking effect.
"The reason is that, first, we have to make the necessary adjustments to the government procedure of taxation so that no party/arm of government is sued for contempt," Murugara said.
This in effect means salaried Kenyans will continue filling the pinch of the 1.5 per cent housing levy until January 10, 2024.
