Attorney General Justin Muturi has advised KRA that the housing levy lacks legal provision to enable its collection and administration.
Muturi cautioned KRA against the collection of funds from the housing levy as it was declared illegal by the court on January 26th, 2024.
The Attorney General thorugh a letter was responding to the KRA Commissioner General Humphrey Wattanga who sought guidance from his office on the matter and copied Treasury and Housing and Urban Development PS Chris Kiptoo and Charles Hinga.
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In the six months under operation, the government collected Ksh 26.8 million from both employees and employers even though the fund was facing legal challenges and rejection from Kenyans who were decrying the high cost of living.
The government was however targeting to collect Ksh 63.2 million as at the end of the June 2024 financial year. Both the employer and employee contributed 1.5 per cent of the gross incomes.
In November, the High Court ruled the fund unconstitutional but allowed the government to continued to collect the levy to January 10th so as to provide ample time to appeal the ruling.
On January 26th, the Court of Appeal stopped the state from receiving any further deductions much to the delight of many Kenyans and employers. The state however confirmed there intention to move to the Supreme Court.
