The High Court has stopped the collection of housing levy by the government. The High Court has also termed the housing levy unconstitutional.

The collection of housing levy was stopped by a three judge bench that included Judges Lawrence Mugambi, Christine Meoli and David Majanja.

The bench ruled that the introduction of the levy was discriminatory because it imposed taxes on salaried Kenyans alone and excluded those working in the informal sector.

“The levy against persons in formal employment to the exclusion of other non-formal income earners without justification is discriminatory, irrational, arbitrary, and against the constitution,” Justice Mayanja said in the ruling.

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“An order is granted prohibiting the respondent from collecting/ charging or otherwise charging on Affordable Housing Act on the basis of section 84 of the Finance Act and all prayers on the consolidated petition not specifically granted,” the High Court ruled.

Following the ruling, government lawyer George Murungara asked the judges to grant a stay for 45 days for the government to figure out the way forward.

The State attorneys also sought permission from the court to prevent Kenyans from demanding refunds from the housing fund for the money they have been deducted since the levy came into force.

The three judge bench was appointed by chief justice Martha Koome in mid-July to hear the petitions challenging the controversial Finance Act 2023.

The controversial Act was challenged in court by Busia Senator Okiya Omtatah and six others.