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Ruto Signs Controversial Housing Bill Into Law
On Tuesday, President William Ruto enacted a contentious piece of legislation that authorizes the government to impose a housing levy amounting to 1.5% of an employee’s monthly income.
This measure aims to fund the construction of affordable housing projects for economically disadvantaged Kenyans. The initiative has faced significant backlash from opposition parties and a broad spectrum of citizens, who argue that it adds to an already heavy tax burden.
Previously, legal challenges had stalled the implementation of the levy, with a court ruling halting deductions due to the absence of an appropriate legal structure. Despite resistance from the opposition, lawmakers recently passed the revised bill, which had been a key promise in President Ruto’s 2022 election campaign. This legislation is part of a broader finance act enacted last June, which also included a doubling of the sales tax on fuel and introduced a forthcoming increase in health insurance levies.
The government defends the levy as a crucial step towards boosting tax revenue, which it says is necessary to narrow the budget deficit and finance public services. Deductions under this scheme commenced last July, but faced public outrage leading to a successful legal challenge by Senator Okiya Omtatah. This challenge argued that the levy disproportionately targeted formally employed Kenyans receiving a regular salary.
In response to judicial concerns, the updated law expands the levy’s scope to include informal sector workers, though it remains uncertain how the government will enforce collection from this demographic. The legislation also establishes the Affordable Housing Fund to oversee the allocation of funds collected through the levy. Officials have assured that deductions will not be retroactively applied to cover the period during which the program was suspended.
Through this initiative, President Ruto aims to deliver 200,000 affordable housing units annually and create over 600,000 jobs in the process. However, the opposition has voiced intentions to challenge the new law in court, criticizing the government for neglecting public apprehensions about the escalating tax burden.
CJ Koome Rejects Claims of Judiciary’s Involvement in Housing Levy Plan
Chief Justice Martha Koome took a moment Thursday in Naivasha to address the Judiciary’s stance on the controversial new housing levy law, following comments made by President William Ruto. The President had suggested over the weekend in Bomet that there was a consensus between the Executive branch and the Judiciary regarding the levy’s implementation.
CJ Koome firmly stated that the Judiciary, being an independent arm of government, had not entered into any agreement with the Executive concerning this matter. She said the Judiciary is impartial and focused solely on executing its legal duties, particularly in relation to the housing levy issue.
“The Judiciary cannot engage in agreements with the Executive on matters that are currently under judicial consideration. We were not involved in the case that led to the suspension of the levy’s implementation,” Koome explained. She addressed the confusion arising from President Ruto’s remarks, suggesting that his words might have been misinterpreted or taken out of context.
According to Koome, the President was actually referring to the Executive’s compliance with a court judgment that outlined steps for administering the housing levy, rather than claiming an agreement with the Judiciary itself.
In her speech, Chief Justice Koome also touched on a proposed Bill that aimed to merge the Employment and Labour Relations Court with the Environment and Lands Court, stating that such a move was unnecessary and outdated. She argued that it would undermine progress in handling labor issues in the country.
However, Koome praised the Employment and Labour Relations Courts for their significant achievements over the past year, notably in reducing the backlog of cases. She said these courts have resolved over 3,400 cases and have seen a decrease in adjournment rates from three to two percent.
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