Kenya: LSK to Sue KRA for Illegal Housing Levy Deduction

4 March 2024
Capital FM (Nairobi)
By Phidel Kizito

Nairobi — The Law Society of Kenya (LSK) is set to sue the Kenya Revenue Authority (KRA) for illegally deducting the housing levy.

In a statement, the organisation's president Faith Odhiambo faulted the taxman over what she termed as the seclusion of workers in the informal sector.

"There is no legal basis to deduct the Housing Levy and this action amounts to contempt of court and arbitrary imposition of tax," she stated.

"The Law Society of Kenya shall immediately commence contempt of court proceedings against the Commissioner General of the Kenya Revenue Authority as well as against all accounting officers and employers who have unlawfully deducted the Housing Levy."

The lawyers' umbrella body threatened to go after KRA Commissioner General Humphrey Wattanga and all the KRA accounting officers for disregarding court orders calling for a halt in housing levy deductions.

On his part, outgoing president Eric Theuri called on all employees whose salaries have been deducted to share their pay slips in a bid to facilitate the application seeking refund of the deductions.

The statement by LSK comes week after a letter by Attorney General Justin Muturi warning KRA against deducting the controversial Housing Levy.

Muturi in a letter to KRA Commissioner General cited lack of a legal framework to support the deduction from salaried employees.

"The upshot of this is that there is no legal basis on which the housing levy as provided in section 84 of the Finance Act can be implemented. Therefore, our considered opinion is that as of January 26 2024 there is no legal provision that enables the collection and administration of the housing levy," the AG stated.

A three-judge bench had last year ruled that the levy was discriminatory and a direct violation of Article 10 of the constitution of Kenya.

However, the Senate is this week set to deliberate on the Affordable Housing Bill which was approved by the National Assembly setting the stage for both salaried and non-salaried, to contribute 1.5 percent of their income towards the Affordable Housing Fund.

Read the original article on Capital FM.

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