President
William Ruto on Wednesday pleaded with the Court of Appeal to allow the
government to continue collecting the controversial housing levy, pending the
hearing of an appeal challenging its legality.
President
Ruto stated through Attorney General Justin Muturi that the government has
generated 120,000 jobs through the affordable housing program and plans to
build 258,874 homes yearly. These plans would be at risk if the court decides
to stop collecting the levy.
The
housing levy was declared unlawful by the High Court last year on the grounds
that it discriminates against individuals in formal employment while excluding
those in the informal sector.
However,
the ruling was set aside by a three-judge bench until January 10 to enable the
government to file an appeal.
The
Attorney General Informed Judges Hannah Okwengu, John Mativo, and Mwaniki
Gachoka of the Court of Appeal that there had been several significant
accomplishments in the six months since the tax went into effect, one of which
being the increased funding for the affordable housing project. According to
Mr. Muturi, 32,420 units are still scheduled for launch, while 39,879 units
have already been launched.
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Infrastructure
projects initiated pursuant to the affordable housing, and in line with the
government's objective to facilitate affordable housing for the public, are
presently underway. In the absence of a stay, the abrupt halt to these projects
will lead to irreparable damage, significant impacting the economy, Muturi
said in submissions filed in court.
The
Kenya Revenue Authority (KRA) used the same gross to calculate Pay As You Earn,
a type of double taxation, in addition to the gross-on-gross taxation on
workers' income that makes up the affordable housing fund. Each employee makes
a 1.5% contribution, matched by a similar percentage by the employer.
Prof.
Njuguna Ndung'u of CS Treasury supported the Attorney General's pleas, stating
that the Finance Act, which is under question, has been providing the
government with monthly revenue of Sh5 billion and yearly revenue projected at
Sh73 billion.
According
to Prof. Ndung'u, in order to protect the stability of the current agreements
and prevent potential legal actions resulting from the cancellation of
contracts and agreements, the High Court's ruling must be suspended.
Senior
Counsel Kiragu Kimani said although the consequences of the failure to allow
the government collect the taxes are irreversible, Kenyans being deducted the
levy can get a refund, in case the court finds the levy unconstitutional.
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On
the other hand, if the stay order sought herein is not granted and the intended
appeal is successful, the government would have lost an opportunity to collect
revenue required for the implementation of the affordable housing programme.
This effect is irreversible ,he said.
According
to Mr. Kimani, the government must pursue the appeal while simultaneously
attempting to address the issues raised by the High Court by introducing a bill
in parliament.
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