The Federation of Kenya Employers (FKE) has rejected 1.5 per cent Housing Fund Levy and called for dialogue to address the issue.
The FKE has also warned the government against defying court orders, saying it sets a bad precedent which is not good for the country.
FKE was reacting to statements issued by the Housing Principal Secretary and the Kenya Revenue Authority Commissioner General who on Tuesday issued a public notice through the local dailies requiring employers to deduct and remit the Housing Fund Levy beginning May 9.
The Federation’s Executive Director, Jacqueline Mugo on Wednesday said the action is unlawful and contempt of court which sets a bad example and may create chaos in future.
The court on December 19 last year suspended the implementation of the Housing Fund Levy which has been set at 1.5 per cent of an employee’s basic salary.
The orders were extended on April 8 after FKE moved to court to challenge the levy.
On Wednesday, Consumers Federation of Kenya moved to court and successfully obtained orders suspending deduction of the 1.5 per cent of basic salary towards the Housing Levy Fund.
Both two cases have been consolidated and will proceed for hearing on May 20.
According to the gazzette notice, both the employer and the employee will contribute the 1.5 per cent.
Mugo said though the idea of developing houses for Kenyans is noble, there are many issues around the governance of the fund that are still contentious.
“As FKE, we are pleading for dialogue as it’s crucial for employers to be involved in this weighty matter,” said the FKE boss.
Addressing the press on the sidelines of the federation’s 59th Annual General Meeting in Mombasa, Mugo said they support the Big 4 Agenda but its implementation should not be done in a manner that can hurt businesses.
She blamed the Housing ministry for failing to consult employers who she said are key stakeholders in the housing project and Big 4 Agenda.
“The government cannot talk to trade unions alone and ignore other stakeholders. We intend to continue with the legal process until Kenyans get justice,” she added.
The FKE boss noted that a noble idea of housing has to be crafted by all stakeholders and all key aspects of funding and ownership addressed properly.
She asked the government to withdraw that notice and allow parties to go back to the drawing board and come up with a collective method of housing project.
Affordable housing is part of the Government’s Big Four Agenda. Others are food security, universal health care and manufacturing.
By Mohamed Hassan