FKE Orders Kenyan Employers to Halt Housing Levy Deductions as Court Declares It Unconstitutional
The Federation of Kenya Employers (FKE) has directed all Kenyan employers to cease the deduction of the Housing Levy in response to the Court of Appeal’s decision declaring it unconstitutional.
According to a declaration from Jacqueline Mugo, the Executive Director of FKE, the Federation emphasized that every employer must now adhere to the court directive, ceasing mandatory deductions until the Appeal is heard and resolved.
“In light of the court order, we advise our members, not to deduct the levy unless the Court of Appeal rules otherwise after the hearing of the substantive appeal or in the alternative, should the government challenge the said ruling in the Supreme Court, the said Court reverses the ruling delivered today.”
The Housing Levy required a compulsory 1.5 percent reduction from an employee’s income, and the employer matched this deduction.
The choice, as per FKE, was influenced by the Court of Appeal’s decision to invalidate the levy due to the absence of a legal foundation.
A panel of three judges, including Justices Lydia Achode, John Mativo, and Mwaniki Gachoka, found that the imposed fee unfairly singled out a specific group of Kenyan citizens with salary statements, leading them to conclude that it was unjust.
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“In dismissing the application, the Court of Appeal noted that the levy was introduced without a legal framework,” FKE explained
“Further, the Court of Appeal indicated that its decision was based on public interest, which in the case was in favor of halting the deduction pending the hearing and determination of the Appeal.”
After the verdict, President William Ruto declared his intention to challenge the decision, emphasizing that his administration remains committed to pursuing the Affordable Housing program despite facing challenges.
The president clarified that the initiative was a crucial component of his agenda, as it offered employment prospects for the citizens of Kenya.
“I have heard what the people in the opposition are saying and they are opposed to the housing program. I asked them what is alternative and they said Maandamano,” Ruto stated in Meru County.
“Do you want the housing program to continue? Aren’t you the ones who have a say here? Isn’t your voice the voice of God? Now I have the command to continue with this program,” he added.
FKE Orders Kenyan Employers to Halt Housing Levy Deductions as Court Declares It Unconstitutional