By a Public Notice carried in the mainstream media on April 16, 2019, the 1st Respondent informed employers and employees that the provisions of the Finance Act, 2018 and specifically relating to Section 31A of the Employment Act, 2017 as relates to payment of 1.5% (by employers) and 1.5% (by employees) making a total of 3% in respect of Housing Fund Levy has taken effect and must be complied on or before May 9, 2019 and other successive months. 

The said Notice further provides for voluntary contributions to the Housing Levy Fund at a minimum of Kshs. 200 per month for the non-salaried citizens. 

By dint of the said Public Notice, Kenya Revenue Authority has been directed to collect the said Housing Levy Fund together with other statutory deductions. This means any default will attract interest and penalty of 5% besides other penalties.

It is not a tax. It is a levy. Levies are imposed on businesses. Tax are imposed on individuals. It is against the provision of Article 19 of the Constitution.

The Petitioner avers that there was no known public participation prior to insertion of Section 31A of the Employment Act, 2007 and prior to issuance of the Public Notice by the 1st Respondent as made on April 16, 2019.

The Housing Levy Fund will lead to an unjustified over-taxation of Kenyans. There is no law that compels social security on an individual’s housing. Housing is a private arrangement. Indeed, the Kenyan Constitution at Article 11 allows and recognizes diversity some of which does not allow formal housing designs such as the Njemps Community.

Members of the public are at a loss as to how the Housing Levy Fund will be operationalized owing to the fact that there is no inclusive statutory body corporate that is representative of diverse interests. Based on the history of poor management of public funds, the Petitioner avers that it has legitimate concerns and fears that the Housing Levy Fund will not be managed any differently and as such it amounts to misuse of public funds.

The said Housing Fund Levy is discriminatory and oppressive to those in informal employment and those who already own houses or those who do not wish to own more houses.

Introduction of the Housing Fund Levy is not a priority in Kenya because there are more pressing issues such as 13 Counties being ravaged by hunger, drought and farmers unable to secure farm input on time; Health challenges and unmet expectations on NHIF, rising cost of living and poverty, among others.

Implementation of the Housing Fund Levy will increase unemployment as many employers will resort to cut down their workforce to the detriment of the economy. The Petitioner contends that statutory amendments that increase cost of human resource will create job loses thus worsen the unemployment crisis in Kenya.

The said Housing Fund Levy does not guarantee that all contributors under the scheme would get houses after investing their money.

The Housing Fund Levy will be unfair, oppressive and discriminatory to many citizens such as those who own houses, are retiring or about to retire, People Living with Disability, Senior citizens, low income earners, retrenched workers, the terminally ill workers, and so on.

The said Housing Fund Levy promotes impracticality on emphasizing ownership as opposed to the modern trend of accessing housing. By implying, for instance, that a voluntary contributor can give Kshs. 200 minimum per month for 15 years, it is superfluous and absurd that the Kshs. 36,000 collected by the Fund will purchase a house of whatever quality. On the contrary, if the Funds were invested other ventures, they could earn higher returns.

The Housing Fund Levy assumes there would be job security in private and public sector and even if job security was guaranteed, the Fund has no mechanism of immediate cash refund together with applicable interest rates. In any case, the Fund is styled as though it was a deposit-taking enterprise which offends the provisions of the Banking Act as read with the Central Bank Act.

The Respondents and the Public will NOT suffer any prejudice if Kenyan citizens are given sufficient to allow public participation and appropriate legislation.

The Housing Fund Levy will compel employees in private and public sector to invest in housing which may not be a priority to their individual needs thus infringing their constitutional right of utilising their earning according to their wishes.

It is unreasonable to compel a citizen who will not secure a house to contribute towards house ownership of another person without corresponding benefit.

The Housing Fund Levy is irrational because it does not factor the fact that some employees in private and public sector enjoy reasonable housing allowances and are members of home ownership schemes as part of their employment.

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