Attorney-General Justin Muturi has recently made a significant announcement, cautioning the Kenya Revenue Authority (KRA) against continuing to collect the housing levy. This levy, which has been declared illegal by the Court of Appeal, has sparked controversy and raised questions about its legitimacy and implementation. In a letter dated February 12, 2024, KRA Commissioner-General Humprey Wattanga sought guidance from the Attorney-General on the government’s position regarding this contentious levy.
The Attorney-General’s response was clear and straightforward. He stated that the housing levy had no legal basis at the time of the Court’s decision, and therefore, the taxman should refrain from making any further collections. In a letter addressed to Mr. Wattanga on February 21, 2024, Attorney-General Muturi emphasized that there was no provision enabling the collection and administration of the housing levy after the Court of Appeal ruling on January 26, 2024. This ruling cast doubt on the legality of the levy and called into question the government’s ability to enforce it.
- 7 Lessons African Leaders Can Learn from Lee Kuan Yew for Development and Progress
- Washington’s Crossing of the Delaware: A Revolutionary Turning Point
- Kisii Blogger Duke Nyabaro Strangled to Death: Post-Mortem Report Reveals Shocking Details
- Kenyan Reactions to Donald Kipkorir’s Critique of Cabinet Ministers
- Simba Arati Nominates County Public Service Board Chair as Deputy Governor
- Senate Impeach Kisii Deputy Governor Robert Monda
It is crucial to understand the background of this controversy surrounding the housing levy. Employers and employees have been required to contribute 1.5% of their gross salary to the housing levy, with the government promising that the funds would be used for the development of affordable housing and associated infrastructure. However, the High Court declared the levy unconstitutional in November but allowed the government to continue collecting it until January 10. The Court of Appeal subsequently halted the collections on January 26, leaving the government and the KRA in a state of uncertainty.
The Parliamentary Budget Office (PBO), which provides economic and budgetary advice to lawmakers, revealed that employers and employees had already paid out a total of Sh26.8 billion in the six months leading up to December. This amount falls short of the government’s target of Sh63.2 billion by the end of the financial year in June 2024. The collection of the housing levy has faced numerous legal challenges, which have created obstacles for the government’s plans to channel these funds into affordable housing projects.
The PBO’s analysis of the Affordable Housing Bill 2023, which aims to establish a legal framework for the levy, highlights several gaps in the proposed legislation. It also warns that the government may face legal risks due to the contracts it has already entered into with property developers for ongoing projects. If the levy remains nullified, the government may find itself exposed to fiduciary risks, as the funding for these projects is constrained by the absence of the housing levy.
The controversy surrounding the housing levy has raised concerns among both employers and employees. Many have questioned the legality and fairness of this mandatory contribution, particularly in light of the Court of Appeal ruling. The government’s intention to appeal the matter at the Supreme Court of Kenya further adds to the uncertainty surrounding the levy’s future.
As this issue continues to unfold, the public needs to stay informed and understand the implications of the Attorney-General’s directive to the Kenya Revenue Authority. The halt in the collection of the housing levy may have far-reaching effects on the government’s plans for affordable housing and the development of associated infrastructure. It remains to be seen how this situation will evolve and what steps the government will take to address the legal challenges raised by the Court of Appeal’s ruling.
You may also like
20 Cheapest Cities in the World to Live in 2024
Kisumu Governor Nyong’o on the Verge of Being Jailed
Analysis of Bachelor of Law Program and Subject Requirements in Kenya
A Mother’s Desperate Plea: Woman Claims Child with Late Marathon Champion Kelvin Kiptum, Seeks to Halt Burial, But Court Denies Order
Moments of Joy as TSC Promotes 36000 Teachers and Vows to Hire Thousands More
Chaos at Keroka Market: A Boundary Row Between Kisii and Nyamira Counties
In conclusion, Attorney-General Justin Muturi’s decision to instruct the Kenya Revenue Authority to stop collecting the housing levy marks a significant development in the ongoing controversy surrounding this mandatory contribution. The Court of Appeal’s ruling, which declared the levy illegal, has further fueled the debate over its legitimacy and implementation. Employers and employees have already contributed substantial amounts to the levy, and the government’s ability to fulfill its promises of affordable housing now hangs in the balance. It is crucial for all stakeholders to closely monitor the situation and understand the implications of this directive from the Attorney-General.
