Attorney General Justin Muturi has issued a stern warning to the Kenya Revenue Authority (KRA), advising against the continued collection of the controversial Housing Levy. This cautionary stance comes in the wake of a recent High Court ruling declaring the levy unconstitutional and devoid of a legal foundation for its implementation.
The genesis of this development traces back to the legal battle surrounding the Housing Levy, with the government’s pleas for stay orders being dismissed by the courts. Despite these setbacks, KRA sought guidance from the Attorney General on the viability of continuing to collect the levy.
AG Justin Muturi responds
In response, Attorney General Justin Muturi emphasized the lack of a legal framework to support the levy’s collection, echoing the sentiments of the court’s ruling. He urged KRA to cease the collection efforts, aligning with the judicial determination that the levy cannot be administered without a proper legal basis.
The decision to halt the collection of the Housing Levy comes as a relief to many Kenyans, as it spares their pay slips from additional deductions. The levy, which had been levied at a rate of 1.5% of both the employee’s and employer’s monthly gross salary, was intended to fund the Affordable Housing Scheme. However, its implementation has faced legal challenges and now stands invalidated by the court.
How much has the KRA been collecting for Housing Levy?
Despite KRA’s efforts to collect funds for the Affordable Housing Scheme, the amounts fell short of the targeted figures. On average, KRA had been collecting approximately KSh 4.47 billion per month, below the intended goal of KSh 5.26 billion. This discrepancy highlights the complexity and controversy surrounding the levy’s implementation.
In light of these developments, the focus now shifts to potential avenues for addressing Kenya’s housing challenges while ensuring compliance with legal standards. The ruling not only impacts the collection of the Housing Levy but also underscores the importance of a robust legal framework for government initiatives.
Moving forward, stakeholders, including government agencies and legal experts, may explore alternative approaches to address the housing deficit while adhering to constitutional principles. The decision to cease the collection of the Housing Levy marks a significant moment in Kenya’s legal landscape, with implications for future policy implementations and governance practices.
