Win for Ruto as High Court rules that Housing Levy is constitutional

The Housing Levy was properly enacted and in accordance with the Constitution, the High Court has ruled.

The court dismissed six petitions which were challenging the Affordable Housing Act.

While delivering the ruling on Tuesday, a three-judge bench said it found that public participation was adequate.

Justices Olga Sewe, John Chigiti and Josephine Mong’are further ruled that the housing levy, imposed at the rate of 1.5 percent of the employee's total gross monthly salary, was properly enacted in accordance with the Constitution.

Employees are deducted 1.5 percent of their gross salary and is remitted together with the employer’s contribution of similar percentage.

“Taking into the account the principles set out and the burden of proof, we satisfied that there was adequate public participation before the enactment of the Act,” said the judges.

The judges also ruled that the petitioners challenging the imposition of the tax failed to prove that the levy was discriminatory and imposes an extra burden on the taxpayer.

Dr Magare Gikenyi and others had argued that the levy was discriminatory as it targeted those in formal employment while excluding those in informal employment. The Nakuru-based doctor said that although he respected the decision of the court, he did not agree with it and would be filing an appeal against the entire decision.

He also asked for certified copies of the judgement to facilitate his appeal.

Cotu supports Housing Levy

In court papers, the Central Organisation of Trade Unions (Cotu) said it supported the Housing Levy and explained that the workers’ umbrella body had been incorporated into the board to ensure that funds collected are used for the intended purpose.

“We are in support (of the levy) and will be there to ensure the funds are used for the intended purpose,” said Cotu Secretary-General Francis Awtoli.

The judges noted although the government admitted that public participation was only conducted in 19 counties, key stakeholders were invited to present their views before Parliament through oral submissions and memoranda.

The court noted that whereas public participation is crucial, it must be authentic and not be treated as a mere formality. However, it does not necessarily mean that all views must be taken into consideration.

“The question to be answered is whether the opportunity was afforded to the public to give their views,” said the judges while ruling that there was evidence of adequate public participation.

The judges also dismissed claims that the national government was encroaching on the functions of the counties by seeking to construct houses across the country.

The petitioners had argued that the role of the national government is agenda setting and policy formulation.

The judges, however, said housing is a shared function and by carrying out the mandate together, both levels of government were promoting interdependence.

The government defended the Housing Act arguing that the levy is meant to enable all citizens have a measure of equitable access to decent affordable housing, pursuant to Article 43 of the Constitution.

The government further said that the affordable housing levy extends beyond salaried employees to include persons who have other sources of income.

According to Lands and Housing CS Alice Muthoni, the revenue base includes all persons, irrespective of their employment status.

Additional reporting by Daniel Ogetta

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