In a setback for the Kenyan government, the Court of Appeal has rejected its attempt to dismiss a protest appeal against a controversial housing tax.
Last November, the High Court ruled that the 1.5% monthly contribution unfairly targeted formal sector workers, leading to a halt in payments.
On Friday, the Court of Appeal extended the suspension of the tax, allowing citizens to refrain from paying until the conclusion of the case. Despite the government’s efforts to resume tax collection during this period, the court’s decision remains valid. The government is expected to appeal this decision.
Last July, the government launched the 1.5% deduction on the gross salaries of Kenyans and foreigners in order to finance the construction of affordable housing for low-income people. This measure has sparked opposition and widespread dissatisfaction among Kenyans, already burdened by the various taxes introduced by President William Ruto.
The government’s argument that suspending the contribution would jeopardize jobs in the housing program and violate existing contracts was not accepted by the court. While the final decision is pending, the judgment brings relief to many Kenyans.
The development follows the appeals court’s approval of a controversial health insurance fee last week, requiring individuals to contribute 2.75% of their monthly wages to a social security program in health matters.
The housing tax case is part of a series of petitions that are creating tensions between the judicial and executive powers. President Ruto has accused allegedly corrupt judges of collaborating with the opposition to sabotage national development projects.