Don’t deduct housing levy, FKE tells employers

The lobby for employers has warned its members not to deduct the housing levy from payslips following the Court of Appeal’s ruling that dismissed its reinstatement.

The Federation of Kenya Employers (FKE) has said it is keen to monitor the development of the matter after the government appealed to continue collecting the housing levy.

The Court of Appeal has thrown out the State’s stay application to reinstate the housing levy that was deemed unconstitutional.

“In light of the court order, we advise our members, not to deduct the levy unless the Court of Appeal rules otherwise after the hearing of the substantive appeal or in the alternative, should the government challenge the said ruling in the Supreme Court, the said Court reverses the ruling delivered today,” said Ms Jacqueline Mugo, the executive director and chief executive officer of FKE.

The Court of Appeal ruled against the State’s plea to suspend the declaration of unconstitutionality made by the three-judge High Court bench.

“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.

After the ruling, President William Ruto insisted that the affordable housing plan would continue, adding that the court should have given the government time to complete creating the law to actualise the plan.

“For the avoidance of doubt, I want to tell them that we were in the reprocess of creating a law to guide the process and they should have given us time. We will also appeal the case so that we continue with the programme and create jobs for millions of Kenyan youth…” Mr Ruto said on Friday on his second day of Meru County tour.

The government appealed the High Court’s decision of late last year made by a three-judge bench that the levy lacks a comprehensive legal framework and violates Articles 10, 201, 206 and 210 of the Constitution.

Read: Ruto pleads with court to allow housing levy

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.

FKE has urged its members including individual employers in Kenya, profit-making organisations, medical and educational institutions and religious and charitable organisations among others to stay keen on the matter and advise employees accordingly.