Employers announce how housing levy suspension will impact Kenyans' salaries

The Court of Appeal on January 26, suspended collection on the Affordable Housing Levy.

The Federation of Kenya Employers (FKE) has promptly issued an advisory to its members, outlining the implications of this ruling and the way forward.

The Court of Appeal’s decision, dated January 26, 2024, struck down the government's application to continue the levy collection pending an appeal.

This ruling emphasised the lack of a legal framework for the levy and underscored the importance of public interest, which, in this case, favored halting the deduction until a final decision is made.

President William Ruto takes charge of a grader during the groundbreaking ceremony for affordable housing project in Thika town on Wednesday, August 9, 2023 President William Ruto takes charge of a grader during the groundbreaking ceremony for affordable housing project in Thika town on Wednesday, August 9, 2023 Pulse Live Kenya

In response, the FKE advised its members to refrain from deducting the housing levy from their employees.

This guidance stands until the Court of Appeal hears and determines the substantive appeal.

Furthermore, it suggested that should the government challenge this ruling in the Supreme Court and the decision is reversed, the situation may change.

"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," FKE said in a statement.

This development is a significant turn in the ongoing saga of the Housing Levy, introduced as part of the government's agenda aimed at providing affordable housing.

However, the levy has faced widespread criticism and legal challenges, primarily due to concerns over its implementation and the burden it places on both employers and employees.