Judges reject pleas to suspend Housing Levy, grill speakers

The High Court has dismissed the application seeking to suspend the housing levy.

High Court in Nairobi has dealt Kenyans a major blow by dismissing fresh twin applications to suspend the housing levy.

Justices David Majanja, Christine Meoli and Lawrence Mugambi unanimously agreed that they had no powers to entertain the applications filed by Law Society of Kenya (LSK) and Kenya Human Rights Commission (KHRC) as the Court of Appeal had already issued an order unfreezing the Finance Act,2023.

In the meantime, the court issued summons to Energy and Petroleum Regulatory Authority (EPRA) Chief Executive Officer Daniel Kiptoo to appear in court on September 13 for hearing of a contempt application filed by Busia Senator Okiya Omtatah.

Omtatah in his application says EPRA disobeyed High Court Judge Mugure Thande orders by hiking cost of petrol and diesel despite the court orders.

Meanwhile, Justices Majanja, Meoli and Mugambi also declined applications to have Senate and National Assembly speakers grilled in court over their affidavits.

Senate Speakers Amason Kingi and his National Assembly counterpart Moses Wetangula filed affidavits opposing the case filed by Omtatah and Eliud Matindi, a petitioner who is based in the United States of America.

The Speakers claimed that the two Houses had sought concurrence before the new law was debated in the lower house.

However, Okiya argued that the Speakers had lied while Matindi stated that parliament's committee had contradicted Wetangula's position.

In the case, LSK argued that Section 84 of the Finance Act 2023, is vague and unconstitutional.

The society's lawyers Eric Theuri, Faith Odhiambo and Noel Ngoloma argued that although Kenyans need to pay taxes, the Kenya Kwanza government illegally enacted the housing levy by bending legislation procedures.

The court was told that the levy was a mongrel of an idea as no Kenyan would tell whether it was a tax, voluntary contribution or fund.

According to LSK, the government ought to have dropped the idea to finance affordable housing as a majority of Kenyans were opposed to the levy.

LSK sued National Assembly, Commissioner General of Kenya Revenue Authority, Kenya Revenue Authority, and the Attorney General.

"There exists no rationale whatsoever as to why the government through the first respondent would force its citizens to contribute to a mandatory scheme in a country where a majority of its citizens are already grappling with harsh economic times due to the existence of multiple layers of taxes," argued Theuri. .

According to the society, the government is also unclear on how Kenyans contributing to finance the houses will benefit from the same.

LSK insisted that taxes ought to be used for the benefit of the payer and should be universal for those in employment and those who are unemployed.

"The said mandatory provision is discriminatory in violation of Article 27 of the Constitution against persons employed in the formal sector as they will be required to make mandatory contributions for the benefit of those in the informal sub sector. This is by no means a way of administering a tax as there is no corresponding duty nor responsibility on persons in the informal sub-sector to make mandatory contributions to this housing fund," added Theuri

LSK stated that it is discriminatory to burden employers and employees who are already grappling with over-taxation and a tough economy.

At the same time, LSK said that it is also unfair for persons who have homes to be forced to finance a project that they will not benefit or qualify for or have no interest in.

The Attorney General and Parliament opposed the application.

Senior lawyer Kiragu Kimani, for the AG, argued that the Court of Appeal had already dealt with the Finance Act, 2023 and lifted the orders.

According to Kiragu, Kenyans can demand their money back if the court finds the section to be unconstitutional.

Following dismissal of the applications, Okiya and Matindi have moved to the Supreme Court, arguing that Court of Appeal judges Mohamed Warsame, Kathurima M'inoti and Helle Omondi erred in unfreezing orders issued by the High Court.