In a setback for the Kenyan government, the Court of Appeal has declined its request to dismiss an appeals case challenging a contentious housing tax.
The High Court had previously ruled in November that the 1.5% monthly levy unfairly targeted formal sector workers, leading to a suspension in payments.
On Friday, the Court of Appeal prolonged the suspension of the tax, permitting citizens to abstain from payment until the case concludes. Despite the government’s efforts to resume tax collection during this period, the court’s ruling remains unaltered. The government is anticipated to lodge an appeal.
Last July, the government commenced the deduction of 1.5% from gross salaries of both locals and foreigners to finance the construction of affordable housing for low-income earners. This action sparked opposition and widespread discontent among Kenyans burdened by President William Ruto’s introduction of various taxes.
The government’s contention that halting the levy would endanger jobs under the housing program and breach existing contracts was dismissed by the court. While the ultimate decision is pending, the ruling offers relief to many Kenyans.
This development follows last week’s endorsement by the appeals court of a contentious healthcare insurance levy, mandating individuals to contribute 2.75% of their monthly salaries to a social healthcare program.
The housing levy case is part of a series of petitions exacerbating tensions between the judiciary and executive branches. President Ruto has accused allegedly corrupt judges of colluding with the opposition to undermine national development projects.
