Accept housing levy is unconstitutional

In Summary

• The High Court ruled on Tuesday that the new 1.5 percent housing levy is unconstitutional

• The housing levy will only be paid by the three million Kenyans in formal employment

Ongoing affordable housing project in Mukuru, Nairobi.
HOUSING LEVY: Ongoing affordable housing project in Mukuru, Nairobi.
Image: X

A three-judge bench ruled on Tuesday that the new housing levy of 1.5 per cent of gross salary is unconstitutional but said it can be collected up to January 10 when the court will hear a government appeal.

It is illogical that something can be unconstitutional today and constitutional tomorrow. The court ought to have suspended collection until January 10 as well.

The housing levy targets three million people in formal employment but ignores 17 million people, such as farmers, who are in informal employment.

So the formally employed alone will bear the cost of providing low-cost housing. This was a major argument behind the court ruling that the levy is unconstitutional.

Formally employed Kenyans have also been hit with 3.75 per cent of salary for medical insurance. So the total extra deduction is 5.25 per cent (not counting the increase in the top range of PAYE from 30 to 35 percent).

It is impossible to stop the rise in the cost of living which is a global phenomenon. But government is placing too great a burden on the shoulders of those in formal employment.

Government should not appeal this court ruling and should allow the housing levy to lapse as unconstitutional.

Quote of the day: "I have never been able to pin down precisely the difference between a tribe and a nation and see why one is thought so despicable and the other is so admired."

Edward Mutesa II
The Kabaka of Buganda was exiled to London on November 30, 1953

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