- This is after the three-judge bench granted a 45-day Stay Order to the earlier judgement.
- The court granted the orders meaning that the state is free to continue collecting the tax until January 10, pending any other orders from the Court of Appeal.
The Ministry of Housing and Urban Development has said all employers must continue deducting the Affordable Housing Levy from their employees and remitting the same to the Kenya Revenue Authority.
In a statement on Wednesday, Cabinet Secretary Alice Wahome, also said the levy remitted should include the employers' contribution.
This is 1.5 per cent of the employee's earnings to the fund with employers required to match an equal amount.
The Ministry warned that employers who fail to deduct the levies will be penalised as per the law.
"Please note that the employer’s contribution to the Affordable Housing levy is an allowable deduction under Section 15 of the Income Tax Act," Wahome said.
"An employer who fails to comply with the law shall be liable to payment of a penalty equivalent to two per cent of the unpaid funds for every month if the same remains unpaid."
She added that the housing ministry is committed to ensuring employers are optimally supported and will continuously engage stakeholders to enhance compliance with the ALH deductions.
Wahome's statement comes barely a day after the High Court declared the Housing Levy unconstitutional and shortly after, ordered that Kenyans will continue funding the same until January 10, 2024.
This is after the three-judge bench granted a 45-day Stay Order to the earlier judgement.
Sitting on Tuesday, judges David Majanja (presiding), Christine Meoli and Lawrence Mugambi ruled the levy as unconstitutional, null and void.
They cited discrimination in the section supporting the levy.
"...That levy against persons in formal employment with the exclusion of other non-formal earners without justification, discriminatory, irrational, arbitrary and in violation of Articles 27, 201 of the constitution," Justice Majanja said.
Minutes after the ruling, the state through lawyer George Murugara asked the court to stay the orders.
He said this would enable the government to make necessary adjustments and contemplate whether they would appeal the decision.
This was opposed by the petitioners including the President of the Law Society of Kenya Eric Theuri.
They argued that the application was in a negative order.
However, after deliberations, the court granted the orders meaning that the state is free to continue collecting the tax until January 10, pending any other orders from the Court of Appeal.
"An order of stay be and is hereby issued staying the effect of this judgement 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.