Jump to navigation

Kenya

Court blocks housing levy as new taxes bite

Some of those who voted for William Ruto report buyers' remorse as economic conditions worsen

Kenyans are bracing themselves for two years of budgetary austerity but the scale of the hit to payslips will be delayed after the Supreme Court blocked the Finance Bill, which set out several new taxes including a controversial housing levy (AC Vol 64 No 13, The new age of austerity).

Increases to the top rate of income tax from 30% to 35% and a doubling of VAT on fuel are now in force but the compulsory deduction of 3% of every employee's monthly wages towards a National Housing Development Fund has been stayed after the Supreme Court decided that Chief Justice Martha Koome should hear the case in full (AC 7/6/23, Ruto's housing levy is triggering mass dissent).

The government says the levy, which is capped at 5,000 shillings ($35.89) for both employees and employers, will be used to build affordable houses for low-income people.

Yet the case rests on the constitutional requirement for the government to consult the county administrations on money bills, and on whether the constitution permits the creation of an earmarked housing levy.

Opposition leader Raila Odinga's protests against the Ruto government's economic management and the cost of living crisis have not forced concessions from the President, they show the pain felt by Kenyans, particularly the lower middle class voters who shifted to Ruto's camp in last August's elections.



Related Articles

The new age of austerity

Higher taxes will finance any extra spending as the region's finance ministers rein in borrowing and try to cut back the public sector

The headline figures that government spending in Uganda, Tanzania, Kenya and Rwanda, is set to increase by 10%, 7%, 6.5% and 5.65% respectively, suggested that little had changed...

READ FOR FREE

DISPATCHES

Ruto's housing levy is triggering mass dissent

The government says its new plan will help home buyers but it risks hurting low and middle-income workers

Pressure is piling on President William Ruto's government over planned tax rises in the Finance Bill due next week that has prompted the country's public service trade unions...

READ FOR FREE

The Harambee House deal

A compromise deal has pulled the rival parties back from the brink but much detail still has to be resolved

The two-page agreement signed by President Mwai Kibaki and opposition leader Raila Odinga at Harambee House on 28 February could hardly have been simpler. Drafted by Attorney General...


Warnings of a bad election

The rival leaders are trying to shore up their shaky alliances as hate speech and clashes threaten next year's vote

Both sides are mobilising their foot-soldiers for a bitter campaign although the parliamentary and presidential elections are still 13 months away. The contest will again pit President Uhuru...


Ruto goes West

A ten-day tour of the United States and Britain at the beginning of March marks Deputy President William Ruto's most important trip yet ahead of August's presidential elections....