The Court of Appeal, on Friday, ordered the government to halt Housing Levy deductions until cases filed against the programme are heard and determined.
In its ruling, the three-judge bench consisting of, Justices Lydia Achode, John Mativo and Mwaniki Gachoka ruled that the housing levy remains suspended as declared by the High Court.
It also ended the deduction of the charges after the window granted to the government to collect the money ended on January 26.
As such, the judges argued that it would be unfair to deduct the money as it could not predict its final verdict. If found unconstitutional, the process of refunding the money would complicate the case.
Housing Levy was also found to have targeted a section of Kenyans, only those with payslips, a process which the court argued was unjust.
"The trial Court held that the Housing Levy was introduced without a legal framework. It also held that the levy was targeting a section of Kenyans. In our view, the public interest lies in awaiting the determination of the appeal.
"This is because if the stay sought is granted at this stage, should the appellate Court affirm the impugned decision, then some far-reaching decisions that will have been undertaken pursuant to the impugned laws may not be reversible. Public interest in our view tilts favour of in not granting the stay or the suspension sought. Public interest tilts in favour awaiting the determination of the issues raised in the intended appeals," the judges ruled.
Furthermore, the judges ordered four consolidated appeals to be heard as soon as possible to allow issues raised in the appeals to be resolved.
On January 3, 2024, the appellate court upheld the status quo regarding the levy’s collection until the aforementioned date when a decision will be made.
"The ruling on these consolidated applications will be delivered on January 26, 2024. In the meantime, the status quo obtained as of today shall be maintained until the delivery of the ruling," the Court of Appeal noted in a judgement delivered on January 3, 2024.
In the January 3 ruling, the three-judge bench heard from the state which argued that failing to grant orders to stay the High Court decision would lead to unimaginable consequences.
In its judgment on November 28, 2023, the High Court had declared the housing levy unconstitutional citing discrimination as the funds are being remitted by Kenyans in formal employment only.
It however allowed a state prayer to grant stay orders on the ruling until January 10, 2024, pending an appeal.
