The housing levy is back in court. Peter Okiro has filed a petition of appeal at the Supreme Court against the Court of Appeal decision that upheld the Affordable Housing Act, 2024, Capital FM reported. The appeal reopens the debate over whether the 1.5 per cent levy is constitutional.
In directions issued on Wednesday, the Supreme Court ordered Okiro to serve the petition on the respondents by close of business the same day. The respondents then have 14 days from service to file their responses. Okiro will have seven days after that to file a rejoinder, if needed. The case will come up for a virtual mention on December 4 for further directions.
For workers, nothing changes yet. According to Capital FM, the directions do not decide the merits of the appeal and do not suspend the levy. Employees still pay 1.5 per cent of their gross monthly salary, and employers match it. Non-salaried earners pay 1.5 per cent of gross income, subject to the applicable statutory provisions.
The appeal follows a September 25 judgment in which a five-judge Court of Appeal bench dismissed 42 consolidated appeals against the law. The judges found that the levy was a lawful use of the government's taxing powers. They also found that it served a legitimate public purpose. They rejected claims that it violated property rights by making workers fund a programme they might not benefit from. "Taxation enacted through Parliament for a clear public purpose does not violate private property rights," the court said.
The bench also ruled that different collection methods for formal and informal sector workers did not amount to unconstitutional discrimination. The government had argued that Parliament met public participation requirements. It cited nationwide consultations, stakeholder hearings and written and oral submissions.
The fight dates back to November 2023, when the High Court struck down the levy introduced under the Finance Act, 2023. The court found that it lacked an adequate legal framework and discriminated against salaried workers. The government responded with the Affordable Housing Bill, which became law after presidential assent on March 19, 2024. The High Court dismissed new petitions against that law in October 2024, which led to the appeals decided in September.
The levy is a key source of money for President William Ruto's affordable housing programme. Capital FM noted that the new appeal adds legal uncertainty to a programme that depends on continued deductions from workers and employers. No ruling has yet been made on the constitutional questions Okiro has raised.