• Raila said the court’s decision to stay the orders until January 10 does not negate the fact that the levy is unconstitutional.
• Housing CS Alice Wahome had warned that failure for employers to remit employee share of the levy plus the employer’s contribution will attract fines.
Image: AZIMIO/X
Azimio leader Raila Odinga has asked employers to stop paying the 1.5 per cent housing levy after the court declared it unconstitutional.
In a statement delivered Wednesday evening at the SKM Command Centre in Nairobi, Raila said the court’s decision to stay the orders until January 10 does not negate the fact that the levy is unconstitutional
“The court made a very fundamental pronouncement that this matter is unconstitutional. A stay does not make it constitutional,” he said.
“My view is that the matter still remains unconstitutional and therefore I would urge all the employers to immediately stop paying anything because they will be acting unconstitutionally,” Raila added.
The former Prime Minister was responding to a statement by Housing and Urban Development Cabinet Secretary Alice Wahome that employers should continue remitting the housing Levy without fail until the day the stay orders take effect.
She warned that failure for employers to remit employee share of the levy plus the employer’s contribution will attract fines.
“It is important to note that the employer’s contribution to the Affordable Housing is an allowable deduction under Section 15 of the Income Tax Act. An employer who fails to comply with the law is liable to pay a penalty of two per cent of the unpaid amount of each month that it remains unpaid,” CS Wahome warned.
On Tuesday, a three-judge bench of the High Court Justices David Majanja, Lawrence Mugambi and Christine Meoli declared sections 84, 72 to 78 of the Finance Act, 2023 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.
The joy among Kenyans was, however, short-lived after the same court stayed the order for a period of 45 days on the prayers of the legal team representing the government in the matter.
Lawyer George Murugara told the court that the grace period will accord the state time to decide whether or not it will appeal the decision without acting contemptuously in light of the order that declared the Housing Levy null and void.
"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.
The judges granted the prayers saying they are not the final authority on the matter.
They said the respondents have a right to seek redress at a higher court pending the formal filing of an appeal.
"An order of stay be and is hereby issued staying the effect of this judgment issued today November 28, 2023, pending the filing of a formal application for the stay of conservatory orders in the Court of Appeal," Justice Majanja ruled.
Speaking later on Tuesday at the 5th Congress of the International Trade Union Confederation-Africa at Safari Park Hotel, Nairobi, President William Ruto said he is keen on ensuring the affordable Housing programme is a success and hinted that the government will appeal the court decision.
"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.