The High Court in Kenya has ruled that 1.5 percent levy aimed at financing affordable housing, imposed through a finance law in June, is unconstitutional, dealing President William Ruto’s administration a big blow.
This as President Ruto announced yesterday that the affordable housing project has created at least 120,000 jobs since its inception.
However, the court deferred the implementation of the ruling until January 10, providing the government with an opportunity to appeal.
Judges Lawrence Mugambi, Christine Meoli and David Majanja ruled that the introduction of the levy was discriminatory since it imposed taxes on salaried Kenyans and excluded those working in the informal sector.
In its verdict, the court highlighted that the government had failed to offer a reasoned justification for singling out formal sector employees for the housing levy.
Judge David Majanja declared, “The introduction of the housing levy… is discriminatory, irrational, and arbitrary, and is in violation… of the constitution.”
Subsequently, the judges granted the government lawyers’ plea for a 45-day postponement of the order, allowing time to deliberate on whether to file an appeal or make revisions to the law to address the issues raised by the judges.
This finance act, which included the doubling of fuel tax and an increase in the top income tax rate, led to violent protests in July as critics argued that it would exacerbate the financial strain on households amid escalating living expenses.
Speaking yesterday to officials of labour movement, President Ruto said the housing project had helped to create 120,000 jobs among the youth.
“… there are new members out there that you can recruit as the housing project has created 120,000 new jobs,” said Dr Ruto.