BY NT CORRESPONDENT.
Employment and Labour relations court has temporarily stopped government’s plan to deduct 1.5 per cent from employees starting next month.
In a petition, Consumers Federation of Kenya told Justice Maureen Onyango that the Housing Fund Levy is unfair, oppressive and discriminatory to many citizens.
Through their lawyer they said the levy emphasizes ownership as opposed to modern trend of accessing housing. He said the decision by the government to implement section 31A of Employment Act is illegal, unconstitutional and irrational because the notice is too short and insufficient to consumers and the public. He further said the levy will lead to un-justified over taxation.
COFEK though its officials argued that the introduction of the Housing Levy is not a priority in Kenya because there are more pressing issues such as drought, health challenges and unmet expectations on NHIF, rising cost of living among other issues.
They argued that implementing the said levy will increase unemployment as many employers will resort to cut down their workforce to detriment of the economy.
COFEK submitted that the housing Finance Levy does not guarantee that all contributors under the scheme would get houses after investing their money.
“The Housing Fund Levy will compel employees in private and public sector to invest in housing which may not be a priority to their individual needs thus infringing their constitutional right of utilizing their earning according to their earning according to their wishes,’’ said.
They argued that it is unreasonable to compel a citizen who will not secure a house to contribute towards house ownership of another person without corresponding benefit.
“The Housing Fund Levy is irrational because it does not factor the fact that some employees in private and public sector enjoy reasonable housing allowances and are members of home ownership schemes as part of their employment,” COFEK said.
They also argued that the Fund will be unfair, oppressive and discriminatory to many citizens such as those who own houses are retiring or about to retire, people living with disability , senior citizens, low income earners , retrenched workers, the terminally ill workers and so on.
Justice Onyango directed the case to be mentioned on May 20, with plans to consolidate it with another one filed by Central Orgainsations of Trade Unions (Cotu).
