On Friday, the Court of Appeal issued a directive compelling the government to suspend Housing Levy deductions until legal challenges against the program are fully heard and adjudicated. The three-judge panel, composed of Justices Lydia Achode, John Mativo, and Mwaniki Gachoka, upheld the previous High Court declaration, maintaining the suspension of the housing levy.
The court also terminated the collection of charges after the government's authorized window to collect funds lapsed on January 26. The judges emphasized the potential unfairness of deducting money when the final verdict remained uncertain. If the levy were found unconstitutional, the process of refunding the collected funds could complicate the case.
Moreover, the court raised concerns about the discriminatory nature of the Housing Levy, noting that it specifically targeted Kenyans with payslips. They argued that this selective approach was unjust and went against the public interest.
"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 favor of not granting the stay or the suspension sought. Public interest tilts in favor of awaiting the determination of the issues raised in the intended appeals," ruled the judges.
Additionally, the judges mandated that four consolidated appeals be expedited to facilitate the swift resolution of the raised issues.
On January 3, 2024, the appellate court upheld the status quo regarding the levy's collection until the specified date when a final decision would be reached.
"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," noted the Court of Appeal in a judgment delivered on January 3, 2024.
During the January 3 ruling, the three-judge bench considered arguments from the state, which contended that failing to grant orders to stay the High Court decision would result in unforeseeable consequences. The High Court had previously declared the housing levy unconstitutional on November 28, 2023, citing discrimination, but allowed a state prayer to grant stay orders on the ruling until January 10, 2024, pending an appeal.