Azimio la Umoja chief Raila Odinga has urged all employers to cease transferring the 1.5 percent housing levy despite sanctions from government officials.
Raila discussed the Housing Levy matter during his response to journalist inquiries on Wednesday, November 29, 2023, subsequent to revealing Azimio's position on the report by the National Dialogue Committee (NADCO).
"Today, senior government officials, including Lands CS Alice Wahome, issued statements warning employers and workplaces that failure to remit this 1.5 percent will result in fines and other repercussions. What are your thoughts regarding the statements made by those government officials??" the media inquired of Odinga about his thoughts regarding the statements made by those government officials.
The leader of Azimio emphasised that the court's final decision declaring the housing levy unconstitutional meant that employers should cease transferring the levy and disregard the government.
The Housing Levy entails a 1.5 percent deduction from employees' compensation, with employers contributing an additional 1.5 percent.
That is not surprising; Kenya Kwanza's attempt to disregard the rule of law is comparable. The court rendered a decision yesterday, declaring this matter unconstitutional.
Consequently, notwithstanding their assertion of a stay (which would maintain the status quo until January 2024), I maintain the opinion that the matter is unconstitutional.
"Consequently, I would urge all employers to cease payment immediately; otherwise, they will be behaving in an unconstitutional manner," Raila stated.
Raila appealed to employers after Cabinet Secretary (CS) Alice Wahome reaffirmed that the Affordable Housing Levy (AHL) should be withheld from employees' gross salaries and remitted to the Kenya Revenue Authority (KRA) along with the employer's contribution.
The CS emphasised in a statement that noncompliance with the regulation would lead to monetary penalties.
"Section 15 of the Income Tax Act permits a deduction for the employer contribution to the Affordable Housing Levy. Employers should not overlook this deduction.
"For each month that the amount remains unpaid, an employer who fails to comply with the law is subject to a penalty of two percent of the unpaid amount," Wahome explained.
This declaration is in accordance with the High Court's recent ruling that the Housing Levy is in violation of the Constitution.
Significantly, the Kenya Revenue Authority, the Attorney General, and the Speaker of the National Assembly, Moses Wetang'ula, successfully petitioned for a 45-day stay subsequent to the court ruling.
They requested a stay of the High Court decision pending the government's appeal to the Court of Appeal until January 10, 2024.
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