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LSK to sue KRA for contempt of court on housing levy

By Dianah mutunga

The Law Society of Kenya (LSK) has said it will initiate contempt of court proceedings against the Kenya Revenue of Authority commissioner general over alleged illegal deduction of housing levy.

Addressing the press Monday, LSK president-elect Faith Odhiambo said there was no legal basis for the taxman including other state agencies to deduct the funds from employees.

It has also called on Kenyans who may have fallen victims to volunteer the information to the LSK.

“We call upon all employees who have suffered this illegal deduction to get in touch with the LSK through the email address and share their payslips,” said Odhiambo.

This, she pointed out, is to facilitate the filing of the application seeking a refund of the illegally deducted dues.

“The payslips will be redacted to conceal identity details that can be used to identify and possibly punish any employees that share the details with us,” she added.

Outgoing LSK president Eric Theuri said The statement by the society comes in the wake of an advisory by Attorney General Justin Muturi asking KRA to stop collecting housing levy from salaried Kenyans saying it lacks legal basis.

In a letter to KRA Commissioner General Humphrey Wattanga, the AG said the Court of Appeal’s January 26 decision declining to stay High Court orders that declared the levy unconstitutional still stands.

“The upshot of this is that there is no legal basis on which the Housing Levy as provided in section 84 of the Finance Act, can be implemented,” Muturi said.

He was responding to a letter from Wattanga dated February 12 seeking guidance on the government’s position on the matter.

The High Court on November 28, 2023, declared the Housing Levy illegal citing various reasons including that it was discriminatory as it secluded workers in the informal sector.

The three-judge bench, however, stayed the execution of the orders until January 10, 2024, pending the filing of an application for conservatory orders to stay the decision and allow the government to continue collecting the levy.

But on January 26, the Appellate court dismissed the application and reaffirmed the High Court’s ruling that the 1.5 per cent Housing Levy which is meant to finance the affordable housing programme is illegal.

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