By Ebi Kesiena
Kenya’s High Court ruled on Tuesday that a contentious housing levy introduced last year to bolster public finances is lawful.
This decision allows President William Ruto’s government to proceed with the scheme, following a previous ruling in November 2023 that deemed it illegal.
The 1.5-percent levy, applied to the salaries of all taxpaying Kenyans and matched by employers, was enacted in June 2023 to fund an affordable housing program but faced numerous legal challenges.
Judge Josephine Mongare, speaking on behalf of the three-member panel, said, “It is our finding that the levy is properly in place and in accordance with the constitution.”
This levy was part of broader legislation that increased taxes on various goods, further straining Kenyans already grappling with high inflation. The Finance Act 2023 aimed to raise over $2.1 billion to address Kenya’s substantial $78 billion public debt.
Rising anger over tax hikes and soaring prices for essential goods, such as food and fuel, sparked protests against Ruto’s government last year. Similar demonstrations, primarily led by Gen-Z activists, erupted earlier this year in response to the Finance Act 2024, which proposed additional tax increases.
Despite the backlash, Ruto has defended the housing fund, asserting that it will provide homes for the poor, create jobs, and reduce public borrowing.
