Court Drags Implementation of 1.5 Percent Housing Levy

Clerk helps man get released

The government has been barred from implementing the controversial 1.5% housing levy following an order by the Employment and Labour Relations Court.

The case was initially filed by  Central Organisations of Trade Unions COTU, who sought to withdraw the case saying that their concerns were addresses but Federation of Kenya Employers moved in to oppose the decision saying thatCOTU did not involve them in the negotiations.

More than ten cases filed by trade unions against the deduction of funds from employees were put together to save on time if the cases were heard by one court because most of the issues raised were related according to Justice Maureen Onyango.

Justice Onyango noted that those who had filed their cases against the 1.5 housing levy before the High Court will decide whether to proceed with the case or have them consolidated for expeditious hearing. The involved parties are to present their applications to the respondents within two days and for the respondents to file their responses within seven days adding that the case will be mentioned on June 10, for directions.

Finance Bill 2018, which was approved by President Uhuru Kenyatta on ber 21, introduced a 1.5 per cent mandatory levy on a worker’s gross salary with a monthly maximum deduction of Sh2,500 for individuals earning a basic salary of Sh166,000 and above in the name of the Big 4 Agenda.

The deductions put at an estimated Sh55 billion a year will go into the National Housing Development Fund. Individuals earning less than Sh50,000 per month will acquire homes under a tenant purchase scheme while those earning over Sh50,000 will qualify for a 7 per cent mortgage repayable within 15 years through their contributions to the funds.

With public funds getting consumed into the corruption frenzy, the government should prove its citizens that it can actually use resources in a manner that is benefitting the country, before slapping Kenyans with a housing levy.

Comments