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FKE (Federation of Employers) issues directive after court’s ruling stoping Housing Levy deductions

Federation of Kenya Employers (FKE) instructs all its members to stop Housing Levy deductions

In response to the Court of Appeal’s decision that the Housing Levy is unconstitutional, the Federation of Kenya Employers (FKE) has directed all all employers in Kenya to stop deducting the Housing Levy.

The Federation said in a statement that going forward, all employers must abide by the court’s ruling and stop requiring deductions while the appeal is heard and determined.

“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, the said Court reverses the ruling delivered today.”

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The Housing Levy involved a mandatory 1.5 per cent deduction on an employee’s salary, which was matched by the employer.

This comes after the Court of Appeal declared housing levy unconstitutional for lacking a legal framework.

In the ruling delivered by a three-judge bench comprising of Justices Lydia Achode, John Mativo and Mwaniki Gachoka ruled that the government’s decision to impose the housing levy did not follow the stipulated framework.

“The trial Court held that the Housing Levy was introduced without a legal framework. It also held that the levy was targeting a section of Kenyans. In our view, public interest lies in awaiting the determination of the appeal,” the judges explained.

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