Kenyan Court extends orders on1.5 per cent housing levy

Kenya’s High Court has extended orders barring the government from implementing the 1.5 percent housing levy until May 27.

The order was issued on Monday by Justice Maureen Onyango in Nairobi to allow for the consolidation of the various cases filed against the plan.

The Jubilee government plans to take 1.5 percent of workers’ gross salary in the formal sector to set up a housing fund.

But various parties — including the Central Organisation of Trade Union (Cotu), Trade Union Congress of Kenya, Consumers Federation of Kenya (Cofek) and the Federation of Kenyan Employers (FKE) — have filed suits challenging the levy.

There had been an angry response in Kenya to a decision by the authorities to introduce a new salary levy to help build low-cost homes which wanted employees to pay 1.5% of their pay to the housing fund and that amount will be matched by the employer.

The anger stemmed from suspicion that the extra money could be lost through corruption, correspondents say. The government aims to build 500,000 affordable homes by 2022.

The total monthly payment per person will not exceed $50 (£38), but it is hoped that $500m will be raised every year.

The Federation of Kenya Employers (FKE) has repeatedly said that the move to introduce the levy is against a court order, which suspended its introduction pending a hearing on the FKE’s objection.

President Uhuru Kenyatta wants his second term in office, which began in November 2017, to be defined by what he has called the big four: universal healthcare, improving food security, boosting manufacturing and building affordable housing,

The housing levy has been called a tax but at the end of last year Mr Kenyatta said “this is not about tax as it has been made to look, but a saving and a contribution towards owning a house”, the Star newspaper quoted him as saying.

One consumer rights organization questioned whether people should be forced to pay the levy, adding in a tweet that the “government has no history of successfully managing any ‘fund'”.

Many on Twitter questioned where the money would go, with the suggestion that the government tackle corruption first.

Others questioned how they could afford the levy while also facing a rise in the cost of living: