Court gives the government a go-ahead to collect Housing levy.

The government will continue collecting housing levy awaiting the court’s decision on the same on January 26, 2024.

This comes after a three-judge bench of the Court of Appeal ordered that the current situation be maintained until the stated date when a decision will be made on whether the directives will be quashed or extended.

“In the meantime, the status quo obtaining as of today shall be maintained until the delivery of the ruling,” the court order dated January 3, read in part.

Appellate judges Lydia Achode, John Mativo, and Mwaniki Gachoka heard from the state before issuing orders. The state argued that failing to grant orders staying the High Court decision would open the floodgates for unimaginable consequences.

In its judgement on November 28, 2023, the High Court had declared the housing levy unconstitutional citing discrimination as the funds are being remitted by Kenyans in formal employment only.

It however allowed a state prayer to grant stay orders on the ruling until January 10, 2024, pending an appeal.

That stay order lapses next Wednesday.

This, the state argued, would result in an irreversible loss to the government, and prayed that it be allowed to continue with the collection pending determination.

State lawyer Kiragu Kimani said that although the government could not reverse the consequences of barring the collection of taxes, Kenyans remitting the levy could be refunded if the court finds the levy unconstitutional.

“If the stay order sought herein is not granted, the government would have lost an opportunity to collect revenue required for the implementation of the affordable housing programme. This effect is irreversible,” he told the court.

The state also said the affordable housing plan has created some 120,000 jobs which could be jeopardised if the court failed to grant its prayers.

Lawyer Mahat Somane went on to plead with the court saying, “You are our last hope. We have no other remedy”.

The application was however opposed by the original petitioners including Law Society of Kenya president Eric Theuri, Azimio la Umoja One Kenya Coalition and Katiba Institute among others.

Theuri argues that the orders sought by the state would allow the government to continue collecting unconstitutional levies and thus “ought to fail on those grounds.”

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