Kenya: Labour Court Issues Fresh Orders Suspending Housing Tax

A newly-built house. Kenyans have opposed the plan by the government to deduct part of workers’ salaries to fund its housing project.

The Labour court on Wednesday issued fresh orders temporarily stopping the government from implementing the 1.5 per cent levy for the housing fund.

Justice Maureen Onyango issued the order, saying the stay order would allow the consolidation of the current case by Consumers Federation of Kenya (Cofek) with another earlier filed by the Central Organization of Trade Unions (Cotu).

In its application, Cofek says it is "unreasonable to compel citizens who will not secure a house to contribute towards house ownership of another person without corresponding benefits".

It also said the levy would lead to "unjustified over-taxation of Kenyans.

The organisation further noted that there was no proof of consultations before section 31 (a) of the Employment Act, which introduces the levy, was inserted into the Finance Act.

The deduction became law following the enactment of the Finance Act, 2018 that following the budget statement presented to Parliament by Treasury Cabinet Secretary Henry Rotich.

And in a newspaper advertisement on Tuesday, the Housing ministry and the Kenya Revenue Authority announced that the levy "has come into effect", meaning every employed Kenyan would remit 1.5 per cent of their basic salary for April to the National Housing Development Fund.

The Jubilee administration is keen on the project as affordable housing is one of the four pillars of President Uhuru Kenyatta's Big Four agenda.

However, there has been opposition from the public, questions including the fate of people in mortgage plans and if it necessary for Kenyans who own houses to make the contributions.

The Labour court first suspended the directive in December 2018 following an urgent application by the workers' umbrella body, the , which challenged its legality.

The Federation of Kenya Employers has also opposed the plan to effect the deduction from all employees in the public and private sectors.

See What Everyone is Watching

More From: Nation

Don't Miss

AllAfrica publishes around 600 reports a day from more than 150 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.