Blow to Ruto as court keeps block on Kenya housing tax

On January 26, 2024, 11:31 AM

A Kenyan court has dealt a blow to the government, rejecting its attempt to throw out an appeals case on a controversial housing tax.

In November, the High Court found that the 1.5% monthly levy unfairly targeted Kenyans working in the formal sector and ordered payments to halt.

On Friday, the Court of Appeal ruled that citizens should continue not paying the tax until the case ends.

The government had wanted to resume collecting the tax in the meantime.

Kenya’s government is expected to appeal.

It had begun deducting 1.5% of the gross salaries of locals and foreigners last July, to fund construction of affordable houses for low-income earners.

The levy sparked an outcry from the opposition and a large section of Kenyans, who feel burdened by the raft of taxes introduced under President William Ruto.

The government had argued that suspending the levy would render thousands of workers under the housing program jobless and breach contracts that had already been signed.

Many Kenyans are relieved by the judgement, although the Court of Appeal is yet to make its final decision.

The ruling comes a week after the appeals court gave the go-ahead for a controversial healthcare insurance levy, which will require people to contribute 2.75% of their monthly salaries to a social healthcare programme.

Friday’s housing levy case is among petitions that have created a rift between the judiciary and executive, with President Ruto accusing allegedly corrupt judges of colluding with the opposition to sabotage national development projects.