In a recent development, the Court of Appeal in Nairobi, on January 26, 2024, has decided not to extend the orders allowing the continued deduction and collection of Housing Levy contributions. This decision follows a significant ruling by the High Court of Kenya in Nairobi on November 28, 2023, which declared certain sections of the Finance Act, 2023—introducing the Housing Levy contributions—as unconstitutional. The High Court, however, had granted stay orders until January 10, 2024, which were subsequently extended until January 26, 2024.
The Court of Appeal, in its recent decision, declined to grant stay or conservatory orders, emphasizing that public interest leans towards withholding such orders until the hearing and determination of the issues raised in Appeals no. E577, E581, E585, and E596 of 2023 (collectively referred to as “the Appeals”). These Appeals revolve around substantial matters related to the constitutional validity of the contested sections of the Finance Act, 2023.
The Court of Appeal recognized the Appeals as presenting valid arguments and directed an expedited hearing and determination of the raised concerns.
Implications and Suspension of Housing Levy Deductions:
The essence of the Court of Appeal’s ruling implies that Housing Levy deductions from both employees and employers, set at 1.5% of gross pay, along with subsequent collections by the Kenya Revenue Authority, will be temporarily suspended pending the hearing and determination of the Appeals.
Looking Ahead:
The decision underscores the legal intricacies surrounding Housing Levy contributions and sets the stage for a comprehensive exploration of the constitutional validity of the Finance Act, 2023. The Court of Appeal’s emphasis on an expeditious hearing signals an intent to address these matters promptly.
As developments unfold, we are committed to providing timely updates on this matter, keeping you informed of the evolving legal landscape and its implications. Stay tuned for further insights as events transpire.
