Court halts controversial housing levy

NAIROBI - A court in Kenya has suspended the introduction of a controversial new mandatory salary levy to fund the government’s ambitious housing project.

Under the new scheme, which was supposed to have come into effect next month, both the employer and employee were expected to contribute 1.5 percent of the employee’s monthly salary.

But Judge Maureen Onyango halted the plan to allow for three court cases filed against the authorities to be brought together and considered.

There has been an angry response in Kenya to a decision by the authorities to introduce a new salary levy to help build low-cost homes.

The anger stems from suspicion that the extra money could be lost through corruption, correspondents say.

The government aims to build 500, 000 affordable homes by 2022.

The total monthly payment per person will not exceed $50, but it is hoped that $500m will be raised every year.

President Uhuru Kenyatta wants his second term in office, which egan in ovem er , to e defined by what he has called the big four: universal healthcare, improving food security, boosting manufacturing and building affordable housing,

The housing levy has been called a tax but at the end of last year Kenyatta said “this is not about tax as it has been made to look, but a saving and a contribution towards owning a house,” the Star newspaper quoted him as saying.

One consumer rights organisation questioned whether people should be forced to pay the levy, adding in a tweet that the “government has no history of successfully managing any ‘fund.