The government of Kenya has been instructed to stop collecting Housing Levy by a three-judge bench made up of Justices David Majanja, Christine Meoli, and Lawrence Mugambi, who said that the practice violates the constitution.
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Why High Court declared Housing Levy unconstitutional
According to the high court, housing levy which was implemented by the Kenya Kwanza government under the Finance Act 2023, is unconstitutional. The court ruled that the levy was unfair and against the constitution.
“The levy against persons in formal employment to the exclusion of other non-formal income earners without justification is discriminatory, irrational, arbitrary, and against the constitution,” Justice David Majanja said.
However, Justice Mugambi noted that the budget estimates were presented legally while issuing the ruling. He emphasized that, in accordance with Article 114 of the Constitution, the Finance Bill was a money bill.
“In view of the foregoing, we are satisfied that, applying the peel and substance test, the Finance Bill 2023 is a money bill; however, it contains matters that are extraneous to a money bill and are unconstitutional,” Justice Mugambi stated.
Order from High Court; the three justices speak
Although the High Court found the National Assembly’s public participation process adequate, it criticized the Parliamentary Committee for neglecting to take Kenyans’ proposals into consideration. In addition, the petitioners claimed that the National Assembly had erred in not including the Senate in the drafting of the legislation.
The three-judge bench decided that Speaker of the National Assembly Moses Wetang’ula did not need to ask Senate Speaker Amason Kingi for approval of the Finance Act, 2023.
This came about following a legal challenge to the Finance Act filed in court by Busia Senator Okiya Omtatah, the Law Society of Kenya, and other parties, who claimed the Act was unconstitutional.
“The High Court Bench has declared the Housing Levy unconstitutional for violating key provisions including singling out Formal Sector,” Omtatah celebrated moments after the ruling.
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