Azimio la Umoja - One Kenya Coalition party leader Raila Odinga has called on all employers to ignore threats from government officials and stop remitting the 1.5 per cent Housing Levy.
Raila addressed the Housing Levy issue in the evening of Wednesday, November 29, 2023, while answering questions from journalists after announcing Azimio's stand on the National Dialogue Committee (NADCO) report.
"Senior government officials today including Lands CS Alice Wahome have now come out to tell employers as well as workplaces that if they do not remit this 1.5 per cent then they will be fined and that there will be consequences. What do you make of these statements from those government officials?" Raila was asked.
The Azimio leader stressed that the court ruling that the Housing Levy was unconstitutional was final and as such employers should ignore the government and stop remitting the levy.
Under the Housing Levy, employees are deducted 1.5 per cent of their salaries which is matched by employers' 1.5 per cent.
"I am not surprised; that is not unlike Kenya Kwanza to try to ignore the rule of law. The court pronounced itself on this matter yesterday that it is unconstitutional and therefore even if they say there's a stay ( the status quo remains till January 2024), my view is that the matter still remains unconstitutional. And therefore, I would urge all the employers to immediately stop paying because you will be acting unconstitutionally," Raila said.
Raila's plea to employers came after Lands, Public Works, Housing and Urban Development Cabinet Secretary (CS) Alice Wahome reiterated that all employers must continue to deduct the Affordable Housing Levy (AHL) from employees' gross salaries and remit it to the Kenya Revenue Authority (KRA) along with the employer's contribution.
In a statement, the CS stressed that failure to comply with the directive would result in fines.
"It is important to note that the employer's contribution to the Affordable Housing Levy is an allowable deduction under Section 15 of the Income Tax Act. An employer who fails to comply with the law is liable to pay a penalty of two per cent of the unpaid amount for each month that it remains unpaid," Wahome said.
This statement follows the recent decision by the High Court to declare the Housing Levy unconstitutional.
Notably, after the court ruling, Kenya Revenue Authority, the Attorney General and the Speaker of the National Assembly, Moses Wetang'ula, successfully applied for a 45-day stay.
They wanted the High Court ruling suspended until January 10, 2024, to allow the government to appeal the decision at the Court of Appeal.