Big Win as Court finds Housing Levy Unconstitutional
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The High court has delivered its final ruling on Finance Act 2023.
A three-judge bench on Tuesday ruled that some sections of the Finance Act were unconstitutional including the Housing Levy. This was after Busia Senator Okiya Omtatah, the Law Society of Kenya and others moved to court challenging the Finance Act, saying that it was unconstitutional.
The ruling was delivered by Justices David Majanja, Christine Meoli and Lawrence Mugambi.
In the ruling, President William Ruto's administration was ordered to cease collection of Housing Levy as it contravened the Constitution.
The bench asserts that the levy, outlined in the Finance Act 2023, violates taxation principles, proving discriminatory and unfair by creating distinctions between the formal and informal sectors, ultimately rendering it unconstitutional due to its unequal and inequitable application.
"The levy against persons in formal employment to the exclusion of other non-formal income earners without justification is discriminatory, irrational, arbitrary and against the constitution," Justice David Majanja ruled.
Immediately after the ruling, government lawyers asked the High Court for an order to prevent Kenyans from asking for housing levy refunds.
While the High Court was satisfied that the public participation process conducted by the National Assembly was sufficient it faulted the Parliamentary Committee for not giving reasons for denying proposals made by Kenyans.
"The High Court Bench has declared the Housing Levy unconstitutional for violating key provisions including Singling out Formal Sector," Omtatah celebrated moments after the ruling.
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