AG Muturi Advises KRA to Stop Collecting Housing Levy



 Attorney General Justin Muturi has instructed the Kenya Revenue Authority to cease the collection of the housing levy from employed Kenyans, asserting its absence of legal foundation.

In correspondence addressed to KRA Commissioner General Humphrey Wattanga, the AG referenced the Court of Appeal's ruling on January 26, affirming that the High Court's declaration of the levy as unconstitutional remains valid.

"The upshot of this is that there is no legal basis on which the Housing Levy as provided in section 84 of the Finance Act, can be implemented," Muturi said.

He responded to a letter from Wattanga dated February 12, inquiring about the government's stance on the issue.

The High Court ruled on November 28, 2023, that the Housing Levy was unlawful, citing various reasons, including its discriminatory nature towards workers in the informal sector.

Despite this, a three-judge panel postponed the implementation of the orders until January 10, 2024, pending the submission of an application for conservatory orders to suspend the decision and allow the government to continue collecting the levy.

However, on January 26, the Appellate Court rejected the application and upheld the High Court's decision that the 1.5 percent Housing Levy intended to finance the affordable housing program was illegal.

"Therefore, our considered opinion is that as of the date of the delivery of the ruling of the Court of Appeal, i.e on January 26, 2024, there is no legal provision that enables the collection and administration of the Housing Levy," Muturi told the Commissioner General. 

"Kindly be advised."

The Housing Levy was implemented through section 84 of the Finance Act, 2023.

After the court ruled it unconstitutional, the government proposed a new Housing Levy Bill to Parliament, amending the disputed sections.

On February 21, despite opposition from the Azimio faction, the Bill passed its third reading and was sent to the Senate for approval or dismissal.

Azimio MPs left the chamber in protest when their proposed changes were ignored.

Suna East MP and Minority Whip Junet Mohamed criticized the government for controlling Parliament to swiftly advance the Bill.

"Azimio filed several amendments, some yesterday and some today morning. Unfortnately, it looks like there are some instructions from Kenya Kwanza regime that this bill be passed without amendment," he said in a press address outside parliament.

Muturi's decision now offers relief to ordinary citizens as the fate of the Bill rests with the Senate.

If the Senate accepts the amendments made in the National Assembly, the Bill will be forwarded to President William Ruto for approval, thereby enabling the government to recommence the collection of the Housing Levy.




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