Labour Court suspends new govt tax on housing

December 19, 2018 4:52 pm
Treasury had proposed a 1.5pc tax on all employees for Housing Development. Photo/COURTESY NHC.

, NAIROBI, Kenya Dec 19 – It is a blow to the government following a decision by the Employment and Labour Relations Court to stop imposition of 1.5 per cent levy on all working citizens to contribute to the Housing Development.

Justice Hellen Wasilwa has suspended the move, which was to come to effect from January,1 2019 in a case filed by the Central Organisation of Trade Unions (COTU) which claims there was no public participation.

Justice Wasilwa, who made the ruling on Wednesday, instead directed COTU to serve its suit papers on Finance Cabinet Secretary Henry Rotich and his Transport and Infrastructure counterpart James Macharia, ahead of the hearing set for January 21.

COTU argues that implementation of the levy on basic salaries of employees will force them into servitude, resulting in widespread public discontent.

It also faulted the government for the action claiming it defies and threatens good order.

In a sworn affidavit by SG Francis Atwoli, COTU argues that sections of Finance Act giving nod to the taxation requires a serious public debate to enable stakeholders to understand the meaning and its financial implications.

“There was no public participation and involvement in its legislation by stake holders in the labor movement,” he states.

He adds, “The petitioner is opposed to the proposed amendments as they don’t promote good governance, accountability and transparency.”

Atwoli goes on to say that introduction of the tax will result to increase in price levels across sectors in the country. “This will occasion increased inflation which will reduce the purchasing power of Kenyan’s masses and in turn make the lives of Kenya’s poor millions unbearable,” reasons the SG.

It is his argument that over taxation should not be the fall back plan whenever the Government is unable to meet its budget targets.

“Stop public theft of money and recover the stolen monies and properties to plug gaps in the national Budget,” reads court documents.

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