Relief for employees as court suspend housing levy fund tax

The Government’s plan to deduct employees’ salary to finance its affordable housing plan suffered a blow after the court suspended the exercise.

Lady Justice Maureen Onyango’s decision means President Uhuru Kenyatta’s plan to burden Kenyans with more tax to fund his agenda of building homes, will be put on hold for at least one more month, pending determination of the a suit by Consumers Federation of Kenya (Cofek).

The judge’s ruling also came as a big relief to thousands of employees who would have seen 1.5 per cent deducted from their salary beginning May 1 as part of the National Housing Fund Levy.

“Since there were previous orders stopping implementation of the housing fund levy, I am satisfied the application by Cofek is of utmost urgency and grant order stopping the deduction of employees salaries until May 20 when the dispute will be heard,” ruled Onyango.

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She directed that the suit be consolidated with a similar one filed by Federation of Kenya Employers (FKE) to avoid a scenario of two different decisions arising from one cause of action.

The Government, through the Housing ministry and the Kenya Revenue Authority on Tuesday issued a notice to employers to start deducting 1.5 per cent of their employees’ salary which they should match with similar percentage and remit it to the Housing Levy Fund by May 9.

Cofek’s Secretary General Stephen Mutoro (pictured) in his affidavit to support the application, said the fund is discriminatory to those who already own houses who will see their hard-earned salary being deducted to support what they will not benefit from.

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Housing LevyCofekaffordable housing planKenya Revenue Authority