Uncertainty as court declines to extend orders on housing levy

The Court of Appeal’s decision not to interfere with stay orders issued on housing levy by the High Court has left salaried Kenyans in uncertainty.

This comes as High Court orders, extending the payment of housing levy, are expected to expire on January 10.

The High Court had on November 28, 2023, suspended the quashing of the affordable housing levy for 45 days, until January 10, 2024, even after it declared the levy unconstitutional.

On Wednesday, Court of Appeal Judges Lydia Achode, John Mativo and Mwaniki Gachoka, declined to extend the High Court orders for 16 more days until January 26, when the court will sit to look into the matter again.

Unconstitutional

On January 26, the appellate court is supposed to rule on the government’s application, seeking orders that suspend the High Court decision which declared the housing levy unconstitutional.

Yesterday afternoon, Lawyer Githu Muigai pleaded with the judges to extend the orders which would see Kenyans continue paying the housing levy until January 26.

However, before other parties in the case could give their inputs, Justice Achode who maintained that the court had been in session since 10 am decided to adjourn the proceedings to the evening.

“I do not want to start unending arguments on whether the court can give a temporary extension to the stay orders. I will discuss it with other judges and we will give our verdict before the end of the day,” said Achode.

The court resumed at about 4 pm but the judges did not address Muigai’s prayers. By the time we went to the press, the judges had not given their decision on the same.

This comes even as Busia Senator Okiya Omtatah filed an application seeking to declare the High Court stay orders unconstitutional.

Omtatah submitted that it was wrong for the same High Court that declared the housing levy unconstitutional to suspend the implementation of its verdict.

Omtatah maintained that High Court Judges David Majanja, Lawrence Mugambi and Christine Meoli should have no authority to tamper with their own decision.

“My submission is that the High Court had no authority to suspend its own decision. The same should have been referred to the Court of Appeal which has jurisdiction,” submitted Omtatah.

The Senator told the court that the 45-stay should be declared unconstitutional because it was an illegality.

He further argued that if the appellate judges extend the High Court orders, they will be active participants in the illegality.

His sentiments were echoed by the Law Society of Kenya (LSK) and Human rights groups who support Omtatah’s application.

The Kenya Human Rights Commission (KHRC), Katiba Institute, International Commission of Jurists and the Institute for Social Accountability are the latest entrants in the case.

The LSK and its counterparts not only challenge the housing levy but challenge the Finance Act 2023 in its entirety, on claims that public participation was not conducted.

They further submit that some of the clauses in the act, especially taxes, are unfair to low-income society.

“We want the the 45-day stay order controversially issued by the the same court declaring housing levy unconstitutional abolished,” submitted LSK President Eric Theuri.

In response, the Treasury, National Planning Cabinet Secretary, Attorney General, Speakers of the National Assembly and Senate and the KRA, want the levy maintained.

They submit that if the levy is quashed, contracts for workers in affordable housing programmes will be terminated.

Irreparable losses

They add that the government will suffer irreparable losses because the uncollected levy cannot be recovered even if they win the appeal.

“The government has started work on the affordable housing programmes which will be stalled and youths will lose their jobs,” said Muigai.

He added that money meant to pay the Kenyans working on the housing programmes was supposed to be generated from the levy.

All employees, whether on permanent and pensionable terms or contract-based engagements, started contributing to the Affordable Housing Fund in July 2023, when the Act came into force. 

The court will rule on January 26.