The Federation of Kenya Employers (FKE) has advised its members not to comply with the housing levy until the legal dispute is resolved.
The Court of Appeal rejected the government’s attempt to reinstate the housing levy, which was declared unconstitutional by the High Court.
The levy would require employers to deduct 1.5% of their employees’ salaries to fund the affordable housing plan.
“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, the said Court reverses the ruling delivered today,” said Ms. Jacqueline Mugo, the executive director and chief executive officer of FKE.
The government has appealed the High Court’s ruling and asked the Court of Appeal to suspend its effect pending the appeal.
However, the Court of Appeal refused to grant the suspension, saying that public interest favours upholding the High Court’s decision.
“Public interest, in our view, tilts favour of in not granting the stay or the suspension sought. Public interest tilts in favour of awaiting the determination of the issues raised in the intended appeals,” Justices Lydia Achode, John Mativo and Mwaniki Gachoka said.
The Court of Appeal will hear the substantive appeal later.
President William Ruto has defended the housing plan and said that the government is in the process of creating a law to guide its implementation.
He said that the court should have given the government more time and that he would appeal the case further.
