The Federation of Kenya Employers (FKE) has issued a directive instructing all employers in Kenya to cease the deduction of the Housing Levy. This comes in response to a recent ruling by the Court of Appeal, which declared the levy unconstitutional.
In an official statement, the Federation emphasized that employers are obligated to adhere to the court order, suspending the mandatory deductions until the Appeal is heard and a final decision is reached.
“In light of the court order, we advise our members not to deduct the levy unless the Court of Appeal rules otherwise after the hearing of the substantive appeal or, in the alternative, should the government challenge the said ruling in the Supreme Court, and the said Court reverses the ruling delivered today,” the FKE statement reads.
“We encourage you to stay informed on this issue and advise your employees accordingly,” the statement adds.
The Housing Levy, involving a compulsory 1.5 percent deduction from an employee’s salary, matched by the employer, was introduced as part of the tax reforms under the Kenya Kwanza government through the Finance Act of 2023.
The imposition of various taxes has triggered public outcry, with many Kenyans expressing discontent amid a rising cost of living.
