Court suspends housing levy as COFEK challenges move


Court suspends housing levy as COFEK challenges move
Houses in Nairobi. Photo/File

In Summary

  • They argue that implementing the said levy will increase unemployment as many employers will resort to cut down their workforce to detriment of the economy.
  • Further, it is COFEK's position that the housing levy does not guarantee that all contributors under the scheme would get houses after investing their money.

The Consumers Federation of Kenya (COFEK) has filed a suit challenging the government’s decision to implement the Housing Fund levy saying it is illegal and will lead to unjustified over-taxation.

COFEK, though its officials, argue that the introduction of the Housing Levy is not a priority in Kenya because there are more pressing issues such as drought, health challenges and unmet expectations on NHIF, rising cost of living among other issues.

They argue that implementing the said levy will increase unemployment as many employers will resort to cut down their workforce to detriment of the economy.

Further, it is COFEK’s position that the housing levy does not guarantee that all contributors under the scheme would get houses after investing their money.

“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 utilizing their earning according to their earning according to their wishes,’’ reads court papers.

They argue that 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,’’ says COFEK.

Similarly they argue that the fund 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 case is set for mentioning with that filed by COTU and FKF in May 20, 2019.

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