Labour court suspends housing levy

The late Owinyi was a yardstick for many lawyers in his exemplary law career
The late Owinyi was a yardstick for many lawyers in his exemplary law career

The Labour Court has temporarily suspended the implementation of the 1.5 percent levy for the Housing fund. On Tuesday, the government had issued a notice through an advertisement that the levy has come into effect, and every Kenyan would contribute 1.5 percent from their April salary towards the housing project laid out by the Jubilee administration. However, on Wednesday Justice Maureen Onyango issued the new order, saying it will pave the way for the consolidation of the current case by the Consumers Federation of Kenya and another case by COTU, “I direct that the applicant consolidates the case with another similar matter before Justice Hellen Wasilwa.”

The Consumers Federation of Kenya has termed it unreasonable to compel citizens who will not secure a house to contribute towards house ownership by another person without corresponding benefits. In the posted advertisement on Tuesday that drew negative reactions from Kenyans, the Housing Ministry and the Kenya Revenue Authority had also pointed out that the employers are also supposed to send a figure matching the employees deductions. “The employers are required to deduct and remit the levy together with other statutory levies from both the employer and the employee by the 9th of each succeeding month together with other payroll statutory deductions,” and the first contribution was due on May 9th.

COFEK’s lawyer argued that the government has been planning without informing Kenyans especially employees and those in informal settlements. He said there are currently more pressing issues for Kenyans and the levy will make employers opt to cut down their workforce.