Attorney General Muturi advises KRA not to collect housing levy

Attorney General Justin Muturi has written to KRA advising them not to proceed with collecting or administration of of housing levy as there is no law that supports the deduction. Below is part of the statement.

Attorney General response to KRA on why housing levy should not be deducted

Reference is made to the above subject matter and to your letter under Ref. No. KRA/5/1002/26 (10318) dated 12th February, 2024 seeking guidance on the Government's position on the collection of the Housing Levy.

It is noted that the Housing Levy was introduced by section 84 of the Finance Act, 2023. However, upon determination of the High Court in Constitutional and Human Rights Petition E181, E211, E217, E219, E221, E227, E228, E232, E234, E237 and E254 of 2023 (Consolidated) by Majanja, Meoli and Mugambi, JJ on 28th November, 2023, the imposition of the Housing Levy was declared unconstitutional.

The High Court, in the same matter, granted an oral application for the stay of execution until the filing of a formal application for stay or conservatory orders in the Court of Appeal or 10th January, 2024.

Upon the determination of the filing of the formal application for stay or conservatory orders in the Court of Appeal via Court of Appeal Civil Application E577, E581, E585 & E596 of 2023 (Consolidated) L. Achode JA, J. Mativo JA and L. Gachoka CIA on the 26th January, 2024 dismissed the application and declined to grant stay of execution or conservatory orders in relation to the impugned section 84 of the Finance Act, 2023.

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. Therefore, our considered opinion is that as of the date of the delivery of the ruling of the Court of Appeal, i.e. on the 26th January, 2024, there is no legal provision that enable the collection and administration of the housing levy.