MPs demand refund of Sh4.5 million housing levy deductions

When a section of Community based organisations, Jua Kali contractors federation of Kenya,slum residents among others picketed in support of the Housing levy along Harambee avenue Nairobi on December 28, 2023. [Elvis Ogina, Standard]

Lawmakers are furious after they were each deducted Sh10,500 as housing levy for January to cater for President William Ruto's flagship project.

Consequently, Azimio Members of Parliament are now demanding the immediate refund of Sh4.5 million collectively deducted from the legislators as housing levy.

They now want the Parliamentary Service Commission(PSC) to reimburse the money to all the 416 members of the National Assembly and the Senate in light of the recent Court of Appeal of ruling that declared the levy illegal.

The legislators also want all PSC staff compensated noting that the ruling delivered on January 26 halted any further deductions from employees' salaries towards the Affordable Housing Programme, pending hearing and determination of the main appeal.

They communicated their displeasure in a letter by National Assembly Minority Leader Opiyo Wandayi addressed to Speaker Moses Wetangula.

"Despite the above developments, the Parliamentary Service Commission still proceeded to effect the 1.5 per cent housing levy deductions on Members of Parliament and the Parliamentary Service Commission Staff salaries for the month of January 2024," read the letter dated February 1, 2024.

"I am, therefore, writing to demand a commitment from the PSC that it will refund, without any delay, the January 2024 housing levy deductions for MPs and PSC staff. As it stands, such deductions are an illegality and fly in the face of the clear Court ruling."

Wandayi was concerned that the continued deductions amounted to the contempt of court on the part of PSC and called on the Speaker to ensure that the refunds were effected.

"Honourable Chairman, the Institution of Parliament of Kenya plays a key role in the functioning of our nascent democracy and must, at all times, be at the forefront in protecting the rule of law and constitutionalism. I hope your good office will strive to protect its standing in the society," he said.

In June last year, the government implemented a 1.5 per cent housing levy on salaried Kenyans which was aimed at aiding him implement his Affordable Housing Project. The levy was charged on the employee's gross pay.

The Standard has established that lawmakers from both Houses have been remitting a collective Sh4.5 million in housing levy deductions per month.

According to a report by the Salaries and Remuneration Commission(SRC) on the remuneration and benefits for state officers in the Senate and National Assembly, the Speakers of the two Houses each earn Sh1.16 million as gross salaries.

This mean that they are each deducted Sh17,400 towards the Housing levy while the two deputy Speakers each earn Sh928,000 and have been deducted Sh13,920. This means the Speakers paid Sh34,800 and their deputies were deductions to Sh27,840.

The leaders of majority and minority at the National Assembly and their counterparts at the Senate each earn Sh768,000 and have been deducted Sh11,520 each which brings their total deductions to Sh46,080.

At the same time the remaining 346 members of Parliament (excluding the leadership) in the National Assembly have each been deducted Sh10,650 towards the levy bringing their total deductions to Sh3,684,900. Whereas the remaining 64 Senators are each charged Sh10,650 bringing their total deductions to Sh681,600.

This brings the total deductions on the MPs pay slips to Sh4.5 million.

The MPs anger comes just hours after similar protests were voiced by Kenya Union of Post- Primary Education Teachers (Kuppet) on Wednesday.

The union was unhappy that Teachers Service Commission (TSC) had deducted the housing levy from the teachers January payslips and vowed to take legal action against TSC boss Nancy Macharia and other officials in their personal capacities.

Kuppet Secretary General Akelo Misori said the union will take all measures to protect teachers' earnings and benefits.

"This includes instituting contempt proceedings against TSC in their personal capacity over this matter of the Housing Levy tax," he said.

Misori said that TSC had received the orders from the courts in good time for it not to charge the teachers but proceeded to do so anyway.

"Kuppet is horrified by the Teachers Service Commission's flagrant violation of court orders over the Housing Levy. Such action fits in a disturbing pattern where public authorities obey orders at their own convenience. Kuppet demands the immediate release of the illegally deducted taxes to teachers," he said.

TSC has a membership of over 360,000 teachers and accounts for the single largest workers' group that contributes towards the levy.

Others unions that have demand reimbursement of January deductions include the National Trade Union Congress, Kenya Medical Practitioners Pharmacists and Dentist Union, University Academic Staff Union and Union of Civil Servants that last week demanded the government refunds the Housing Levy to its members.

Their resolve to demand for the monies was given an impetus by an announcement by the Federation of Kenyan Employers which, immediately after court ruling, advised its members to immediately cease deducting the housing levies from their employees' salaries.

"Your attention is drawn to a Ruling delivered today January 26th, 2024, in the Court of Appeal dismissing a Stay Application where the Government sought to continue collecting the Housing Levy until the appeal it filed is heard and determined by the Court of Appeal," said Federation of Kenya Employers Executive Director Jacqueline Mugo.

"In light of the court order, we advise our members, not to deduct the levy unless the Court of Appeal rules otherwise after the hearing of the substantive appeal or in the alternative, should the government challenge the said ruling in the Supreme Court, the said Court reverses the ruling delivered today."

Constitutional Lawyer Bobby Mkangi now says that Kenyans whose salaries have been deducted the 1.5 per cent housing levy can and should use the courts to demand for payback.

"The unions, employees, Kenyans in general can sue the accounting officers of those institutions for perpetrating an illegality and for recovery of their monies," said Mkangi.

"Petitions against the leadership (chairpersons and commissioners) of the said institutions may also be lodged," he added.

Mkangi further responded to proposals by a section of Kenyans who had called on employees to cease paying taxes should the government not heed the court orders.

"...problem is that it is hard to pay for other taxes e.g. VAT, excise duty, road levies, etc. because of the collection mechanisms. In the same way a parent does not teach his or her children to disobey rules, or the law, the government does not need to be arm twisted to comply. It should imperatively do so," stated the lawyer.