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Court Rules the Housing levy as Unconstitutional

The court on Tuesday ruled some sections of the Finance Act as unconstitutional including the Housing Levy.

Housing Levy
Finance act representation. Photo/Courtesy

They mentioned that the introduction of the levy was discriminatory. This is because it imposed taxes on salaried Kenyans alone and excluded those working in the informal sector.

The ruling was made by a three-judge bench, David Majanja, Christine Meoli, and Lawrence Mugambi.

President William Ruto’s administration was instructed to stop collection of Housing Levy immediately. The judges mentioned that the collection was going against the Constitution.

After the announcement of the Finance Bill(now Finance Act), many Kenyans were against the harsh taxation methods. Despite this the MPs voted for it in Parliament. Busia Senator, Okiya Omtatah filed a petition against the Finance Act claiming it was unconstitutional.

On July 18, the Chief Justice, Martha Koome, selected judges to hear the petitions. They were to hear and determine the verdict on the petitions filed challenging the Finance Act 2023.

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Finance Act Ruling

Justice Mugambi further ruled that budget estimates were legally presented. He noted that the Finance Bill was a money bill within Article 114 of the Constitution and was legally presented.

“In view of the foregoing, we are satisfied that, applying the peel and substance test, the Finance Bill 2023 is a money bill; however, it contains matters that are extraneous to a money bill and are unconstitutional,” the Court ruled.

According to the judges, the Finance Act was in line with the constitution except a few issues. The housing levy according to the ruling was one of the major issues that were unconstitutional.

The Finance Bill 2023 was passed by parliament on June 22, 2023, and later assented by President William Ruto on June 26. After Omtatah’s petition, the High Court suspended the implementation of the act on June 30. On July 29,however, the Court of Appeal lifted the suspension, leading to a hearing of the case on September 13.

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