Nairobi, Kenya – The Affordable Housing Levy, a central pillar of President William Ruto’s housing agenda, is facing a fresh legal battle after a coalition of civil society organizations filed a petition seeking to halt its implementation.
The petitioners, led by the Kenya Human Rights Commission (KHRC), Transparency International Kenya, the Institute for Social Accountability, Inuka Kenya Ni Sisi, and Siasa Place, argue that the mandatory 1.5 P.c salary deduction is unconstitutional, socially regressive, and a violation of workers’ rights. Employers are equally required to contribute an additional 1.5 P.c on behalf of their employees, doubling the strain on payrolls.
In their joint filing before the High Court, the groups contend that the levy discriminates against formal sector workers who are already overburdened by statutory deductions, while leaving out millions in the informal economy. They argue that the deductions have “impoverished Kenyans while being weaponised as a political tool,” stressing that it contravenes constitutional provisions and promotes economic retrogression.
The petition specifically targets Sections 3, 4, 5, and 12 of the Affordable Housing Act, urging the court to declare them unconstitutional. According to the lobbyists, these sections lack transparency, are unfairly administered, and fail to guarantee equitable access to housing.
“The right to housing cannot be reduced to a compulsory payroll tax that burdens an already strained workforce. The levy is being implemented without sufficient safeguards, and its administration is opaque,” the petition reads in part.
The Affordable Housing Levy has been the subject of fierce legal and political battles since its inception. In June 2023, the High Court temporarily suspended the deductions after a successful challenge, only for the government to reintroduce them through fresh legislation passed by Parliament. President Ruto has consistently defended the levy as essential to financing his administration’s plan to construct at least 200,000 housing units annually, creating jobs and expanding affordable housing access.
Read further;https://x.com/Kenyajudiciary/status/1848910319751508158
However, critics argue that the levy does not guarantee ownership for contributors and lacks accountability mechanisms to prevent misuse of funds. Economists have also warned that mandatory deductions could dampen disposable income and reduce consumer spending at a time when inflation and rising taxation are already biting.
The new petition reignites debate over the balance between the government’s social development agenda and the constitutional rights of citizens. Should the court rule in favor of the petitioners, it could derail one of Ruto’s flagship projects, undermining a policy that has been championed as a cornerstone of his “bottom-up” economic transformation model.
The case is now set to be heard at the High Court in Nairobi in the coming weeks, with the outcome expected to have far-reaching implications for both taxpayers and the administration’s development agenda.
