The court on Wednesday halted President Uhuru Kenyatta's housing plan under the Big Four Agenda.
In its directive, the Employment and Labour Relations Court temporarily suspended the implementation of 1.5 per cent housing tax for salaried workers.
The directive that will take effect until January 21, 2019 followed an application by the Central Organization of Trade Unions (COTU).
The interim orders by Justice Hellen Wasilwa consequently suspended Section 31A of the Employment Act as amended by Section 86 of the Finance Act 2018.
The Francis Atwoli-led organization argued that the implementation of the levy was unconstitutional and amounts to double taxation.
Through lawyer Okweh Achiando, the COTU Secretary-General noted that levying the housing tax on the basic salary of employees will have far-reaching implications on the right to fair remuneration.
Atwoli further opined that there were no proper structures to guide the implementation of the tax.
"The petitioner is aggrieved that its unconstitutional and legally invalid to subject Kenyans to double taxation by imposing the 1.5% housing development levy on basic salaries," the lawyer told the court.
The 1.5 per cent monthly deduction was meant to help the Treasury raise Ksh57 billion annually from workers to finance the proposed National Housing Development Fund (NHDF).
President Uhuru's affordable housing project seeks to build 500,000 houses by 2022 and it's projected to be part of his legacy alongside manufacturing, universal health coverage and food security.
