Kenya Court of Appeal stops President Ruto's housing levy

Friday January 26 2024
President William Ruto

President William Ruto addresses residents after laying the foundation stone for the construction of an affordable housing project in Uasin Gishu County, Kenya on January 9, 2024. PHOTO | NMG


Kenya's President William Ruto's affordable housing plan has suffered a major blow after the Court of Appeal declined to extend an order allowing the government to continue collecting the housing levy.

A bench of three judges on Friday morning ruled that public interest tilts in favour of not granting the order sought by the government.

"Public interest, in our view, tilts favour of in not granting the stay or the suspension sought. Public interest tilts in favour of awaiting the determination of the issues raised in the intended appeals," Justices Lydia Achode, John Mativo and Mwaniki Gachoka said.

The government had asked the Court of Appeal to suspend the judgement of the High Court that found the levy illegal as it targets a section of the population.

Read: Bad week for Ruto as court blocks housing levy

In a decision last year, three judges of the High Court ruled that the introduction of the Housing Levy through amendment of the Employment Act by Section 84 of the Finance Act, 2023 lacks a comprehensive legal framework in violation of Articles 10, 201, 206 and 210 of the Constitution. 


Justices David Majanja, Christine Meoli and Lawrence Mugambi further stated that the imposition of the housing levy against persons in formal employment to the exclusion of other non-formal income earners to support the national housing policy is without justification is unfair, discriminatory, and irrational.

The appellate court said in the ruling that the question that begs an answer is whether in the circumstances of the case, it would be in the public interest to grant a stay whose effect is to allow a statute that is constitutionally illegal to continue being in the law books pending the hearing of an appeal. 

"We do not think so. This is because should the Court hearing the appeal affirm the constitutional invalidity of the impugned laws, then all actions that will have been undertaken under the impugned sections of the law during the intervening period will be legally frail," said the judges.

On January 4, the Court of Appeal allowed the government to continue collecting the controversial housing levy until today's court ruling to decide whether to lift the order or grant a further extension.

A three-judge bench ordered that the status quo be maintained until it rules on Attorney General Justin Muturi's application seeking to continue collecting the levy pending the determination of an appeal on its legality. 

A day before the hearing of the application, President Ruto complained that his plans were being sabotaged through court orders. He vowed to disobey the orders and implement the projects.

Read: The problem with Ruto attacks on Judiciary

Muturi had pleaded with the court to allow the collection of the levy arguing that it had created more than 120,000 jobs since it was started six months ago.

Early this week, the Federation of Kenya Employers (FKE) has poked holes into President Ruto’s affordable housing programme, warning that it risks hurting the already overburdened taxpayer.

The employers’ lobby, in its memorandum on the Affordable Housing Bill, 2023 presented on Tuesday to the National Assembly committee on Housing, termed the 1.5 per cent deduction from employees’ salaries towards the programme an extra burden for workers.