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Employers announce how housing levy suspension will impact Kenyans' salaries

Big news for employees after the Federation of Kenya Employers announced how the suspension of housing levy will impact salaries

FKE CEO Jacqueline Mugo during a past media briefing

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.

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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.

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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.

Jacqueline Mugo, the Executive Director and CEO of the FKE, assured members that federation will keep a close eye on any developments.

She emphasised the importance of staying informed and preparing for any possible changes in the legal landscape regarding this levy.

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For employers and employees across Kenya, this ruling provides temporary relief and a need for vigilance in the face of legal uncertainties.

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