High Court Declares Housing Levy Unconstitutional

In a major blow to the Kenya Kwanza administration, the High Court has declared the 1.5% Housing Levy introduced in the Finance Act 2023 unconstitutional. A three-judge bench ruled that the levy was discriminatory as it only applied to salaried Kenyans in formal employment, violating principles of equitable taxation. The court further found that the levy was introduced without a comprehensive legal framework. The judgement suspends the levy’s deduction, pending an appeal by the government. Treasury Cabinet Secretary Njuguna Ndung’u has indicated the state will challenge the ruling at the Court of Appeal.