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Court suspends housing levy fund

Employees opposed to the Housing Levy  can now breathe a sigh of relief after the High Court  on Wednesday temporarily suspended deduction of 1.5 per cent of employees’ salaries towards the Fund kitty.

The  Labour Court  Judge, Justice Maureen  Onyango issued temporary orders suspending implementation of a gazette notice by the Ministry  of Transport until a case opposing the introduction of the fund is heard on the May 20 when a similar case opposing implementation of the notice will be mentioned.

The  Ministry of Housing and Urban Development Principal Secretary, Charles Hinga had directed employers to contribute 1.5 per cent of emolument for each employee towards the housing scheme.

“I will grant a temporary stay till May 20, 2019. I direct that the applicant consolidates the case with another similar

matter before Justice Hellen Wasilwa, “Labour Court Justice Maureen Onyango said.

Consumer Federation of Kenya (Cofek) through their advocate Henry Kurauka filed an application challenging the

implementation of the order which was to take effect at the end of this month.

Kurauka in his submission argued that the notice offends a number of constitutional articles since there was no public participation and it does not allow for cultural diversity.

“The Ministry has been planning without informing members of the public particularly employees and those in informal settlements,” he said, adding that Housing Fund levy was illegal, unconstitutional, discriminatory, oppressive, irrational and without basis and is not a priority to Kenyans.

“There are more pressing issues like 13 counties being ravaged by hunger, drought and farmers unable to secure farm input in time,” he said, further noting that implementation of the Housing Fund levy will increase unemployment as employers  will opt to cut down their workforce to cope with inflation.

“The scheme does not guarantee that all contributors under the scheme will get houses after investing their money, ” Kurauka submitted.

He said the levy is oppressive and unfair to many citizens such as those who own houses, are retiring or are about to retire.

The  FKE argued that the levy promotes impracticality on emphasizing ownership as opposed to the modern trend of accessing housing.

Cofek also noted that the fund has no mechanism of immediate cash refund together with applicable interest rates. The fund is styled as though it is a deposit–taking enterprise, which offends the Banking Act.

“It is unreasonable to compel a citizen who will not secure a house to contribute towards house ownership of another

person without corresponding benefit,” he said.

By  Alice  Gworo

 

 

 

 

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