Salaried Kenyans will continue to pay the contentious Housing Levy because the government has stated that the deductions will be collected until January 10, 2024.
According to a statement issued by Cabinet Secretary for Lands, Public Works, Housing, and Urban Development Alice Wahome, all employers have been advised to continue deducting the tax until the deadline.
This follows a High Court verdict on Tuesday that granted stay orders preventing the repeal of the affordable housing charge until January 10.
A three-judge bench comprised of Justices David Majanja, Lawrence Mugambi, and Christine Meoli ruled that the levy was illegal because it solely targeted salaried workers and the government was granted a 45-day stay of execution.
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The respondents, led by lawyer George Murugara, contended that the stay orders would allow the government to clean house.
"The reason is that, first, we have to make the necessary adjustments to the government procedure of taxation so that no party/arm of government is sued for contempt," the judge said.
The levy, a key component of the Finance Act, began being deducted from nominally employed Kenyans in July, with the Kenya Revenue Authority (KRA) acting as the collecting agent.
According to CS Wahome, companies will continue to pay their 1.5 percent contribution and a similar rate for their employees.
The High Court ruling surprised President William Ruto, who declared the Housing Plan to be the foundation of his administration.
Ruto applauded the judgment, promising to follow the court's ruling.
Deputy President Rigathi Gachagua has also encouraged the Judiciary to consider the broader societal impact of its ruling, claiming that the levy allows the government to build large numbers to address Kenya's housing problem.
