Court Grants Govt Request to Retain Housing Levy Funds for 45 Days
A three-judge bench has granted the plea by the government seeking a conservatory order for 45 days regarding the Housing Levy that was declared unconstitutional on Tuesday.
In the ruling, the judges granted the government the 45-day period, noting that the conservatory orders would be in force until January 10, 2024.
“An order of stay is hereby issued today pending the filing of a formal application for conservatory orders in the court of Appeal and these orders of stay shall remain in force until January 10, 2024,” Justice David Majanja ruled.
The government lawyers sought the 45-day window to regularise the Housing Levy by taking it to Parliament and subsequently passing it into law.
Through lawyer George Murugara, the government explained that there would be heavy implications should the judges decline the plea. It also attempted to convince the judges that offering it the 45-day window would not mean that the ruling they issued earlier, which nullified the levy, would be negated.
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“These are operations that are going to be affected including what date is the effective cessation of the collection of the levy. Is it from today or the time the Act was enacted? Tomorrow, there will be an avalanche of Kenyans going to KRA asking for a refund. They’re not given their money because there is a procedure that has to be followed. They will be in court with contempt applications, so this is a real danger facing everyone in government who must comply with this order,” the lawyer stated.
“This is the reason why there must be a refund, lest there may be a refund, it cannot be tomorrow. It has to be within a given period of time after systems are adjusted, advice is given and appropriate measures are given. I don’t agree with the submission given that the law cannot be rectified, that we leave to Parliament. If it has its means to pass it, well and good,” he added.
“I urge you to grant us the 45 days. You are not in any way negating your order.”
Petitioners, however, argued that the government should refund the money it had acquired illegally.
The High Court judges had quashed some sections of the Finance Act 2023, declaring them unconstitutional. One of the provisions in the Act includes the Housing Levy, with the judges explaining that it contravenes the Constitution.
“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 Majanja ruled.
Court Grants Govt Request to Retain Housing Levy Funds for 45 Days
