Federation of Kenya Employers Issues Directive to Members on Housing Levy

The Federation of Kenya Employers (FKE) has instructed all employers in Kenya to stop deducting the Housing Levy following the ruling by the Court of Appeal which deemed it unconstitutional.

In a statement by FKE Executive Director Jacqueline Mugo, the Federation noted that all employers should henceforth follow the court order and halt the mandatory deductions pending the hearing and determination of the Appeal.

“In light of the court order, we advise our members, not to deduct the levy unless the Court of Appeal rules otherwise after the hearing of the substantive appeal or in the alternative, should the government challenge the said ruling in the Supreme Court, the said Court reverses the ruling delivered today.”

The Housing Levy involved a mandatory 1.5 per cent deduction on an employee’s salary, which was matched by the employer.

President William Ruto at the Bondeni Affordable Housing Project in Nakuru on Monday, February 13, 2023


The decision, according to FKE, was informed by the Court of Appeal’s verdict to nullify the levy for lacking a legal framework.

A three-judge bench constituting Justices Lydia Achode, John Mativo and Mwaniki Gachoka, deemed the levy only targeted a section of Kenyans with payslips, which they argued was unjust.

“In dismissing the application, the Court of Appeal noted that the levy was introduced without a legal framework,” FKE explained 

“Further, the Court of Appeal indicated that its decision was based on public interest, which in the case was in favour of halting the deduction pending the hearing and determination of the Appeal.”

Following the ruling, President William Ruto noted that his administration would appeal the ruling, vowing that the Affordable Housing program would continue despite obstacles.

The president explained that the program was an integral part of his manifesto as it provided job opportunities for Kenyans.

“I have heard what the people in the opposition are saying and they are opposed to the housing program. I asked them what is alternative and they said Maandamano,” Ruto stated in Meru County. 

“Do you want the housing program to continue? Aren’t you the ones who have a say here? Isn’t your voice the voice of God? Now I have the command to continue with this program,”  he added. 

Housing units at the Bondeni Affordable Housing Project in Nakuru County on Monday, February 13, 2023


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