Kenya's Controversial Housing Levy: Payments to Continue in January Despite Court Challenge

Kenyan employees and employers will continue paying the 1.5% monthly housing levy in January, defying a recent court ruling that declared it unconstitutional. The Kenyan High Court had suspended the levy's implementation on November 28th, pending an appeal by the government. However, on December 22nd, the Court of Appeal overturned the suspension, stating it would hear the government's appeal on February 9th, 2024.

This decision leaves Kenyans facing continued deductions, despite public outcry and concerns about the levy's effectiveness. Critics argue that the levy, introduced in June 2023 as part of the Finance Act, unfairly burdens taxpayers without a clear plan for utilizing the collected funds. The Kenya Federation of Employers (FKE) expressed disappointment in the Court of Appeal's ruling, stating, "This is a missed opportunity to address legitimate concerns about the levy's fairness and transparency."

However, the government maintains that the levy is crucial for addressing Kenya's housing deficit. State Department for Housing and Urban Development Principal Secretary Charles Cheruiyot emphasized, "The government is committed to providing affordable housing for all Kenyans, and the Housing Fund is a key tool in achieving this goal." He further clarified that the collected funds will be used for "construction of affordable housing units, provision of mortgages, and slum upgrading."

While the legal battle over the levy remains ongoing, its immediate impact continues to be felt by employees and employers. Some Kenyans expressed frustration with the court's decision, with one social media user commenting, "We are already struggling with the rising cost of living, and now this? It's just another burden on our shoulders."

Amidst the uncertainty, the February 9th hearing at the Court of Appeal looms large. The court's final decision will determine the fate of the housing levy, impacting millions of Kenyans and the government's housing ambitions. Until then, the debate surrounding the levy's merits and its potential benefits or drawbacks is likely to continue.