LSK, Human Rights Groups Move To Appellate Court To Challenge Housing Levy Stay Order

• The High Court in Nairobi issued stay orders, preventing the immediate removal of the controversial affordable housing levy until January 10, 2024
• This was after lawyer George Murugara requested a 45-day grace period to comply with the court ruling to allow for necessary adjustments to the taxation procedure
• Petitioners want the Court of Appeal to rule that the High Court made a mistake by granting the National Assembly and Executive unrestricted authority to impose taxes

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

The Law Society of Kenya (LSK) and human rights groups will challenge the High Court's ruling permitting the government to continue deducting the unconstitutional housing levy.

The petitioners want the court to rule that the High Court made a legal mistake by asserting it lacks jurisdiction to assess the hardships arising from taxes, contrary to the principles of social justice and fairness outlined in Articles 10, 27, and 201.

They argued that the High Court made a mistake by granting the National Assembly and Executive unrestricted authority to impose taxes, contradicting the provisions of the Constitution.

Human rights groups, including Katiba Institute and Kenya Human Rights Commission (KHRC), also noted the court refused to recognise the Senate's authority to deliberate issues on the Finance Act 2023 touching counties.

LSK president Eric Theuri said the lawyer's union will contest the Executive and Legislature's efforts to reverse the housing tax decision through an appeal to the Appellate Court.

"All petitioners will strongly oppose respondents' attempt to overturn the lower court's finding on the illegality of the Housing Levy. We will also be seeking the abolishment of the 45-day stay order controversially issued by the lower court," Theuri told Citizen TV.

Why the High Court declared housing levy unconstitutional

The High Court in Nairobi issued stay orders, preventing the immediate removal of the controversial affordable housing levy until January 10, 2024.

The court declared sections 84, 72 and 78 of the Finance Act null and void, stating that the housing levy amendment lacks a comprehensive legal framework.

Lawyer George Murugara requested a 45-day grace period to comply with the court ruling and allow necessary adjustments to the taxation procedure.

Why Kenyan employers risk penalty

President William Ruto's administration warned employers against failure to continue remitting the fund.

According to the notice, employers who fail to remit face a monthly penalty equivalent to 2% of the unpaid funds.

Through the Ministry of Lands, Public Works, Housing, and Urban Development, the government issued a public notice on Wednesday, November 29, calling on all employers to obey the court order.