Kenya’s High Court Strikes Down Finance Act 2023: A Setback for Ruto’s Housing Plan.

By Samira Mohamed


On Tuesday 28th November 2023, a ground-breaking ruling was made by the High Court of Kenya, defusing a blow to President William Ruto’s ambitious Affordable Housing plan by declaring key sections of the Finance Act 2023, including the controversial Housing Levy unconstitutional. The High Court, led by Justices David Majanja, Christine Meoli and Lawrence Mugambi affirmed that the imposed levy solely on formal sector workers was discriminatory and violated the Constitution.

Justice Majanja specifically emphasized that the singling out of formal employment for the housing levy without any justification was, “discriminatory, irrational, arbitrary, and against the constitution”. The ruling ordered an immediate cessation to the collection of levy sending ripples through the government’s financing mechanism for Ruto’s Housing Initiative. Justice Mugambi pointed out that the Finance Bill was a money bill, but it contained unconstitutional elements while acknowledging that budget estimates were legally presented.

The court, pleased with the public’s participation process, criticized the Parliamentary Committee for neglecting proposals from Kenyans. The petitioners, led by Busia senator Okiya Omtatah and the Law Society of Kenya further argued that the National Assembly failed to involve the Senate in the law’s formulation. The bench ruled that the National Assembly Speaker, Moses Wetangula didn’t require unanimity from the Senate speaker Amason Kingi highlighting procedural shortcomings.

Ruto’s campaign pledge of providing affordable housing will be affected more broadly by this historic ruling. The finance law’s 1.5% levy nullification will disrupt the government’s plan to alleviate Kenya’s housing shortage by increasing home accessibility.

The court’s involvement highlights the need for a thorough legal framework and the judiciary’s responsibility in ensuring that government policies are in line with the constitution.

Apart from the housing fee, the Finance Act also doubled the fuel tax, therefore raising the highest income tax rate, which incited protests around the country. The court’s scrutiny demonstrates its dedication to protecting constitutional rights and serves as a reminder to the executive branch of the significance of following the law when implementing policies.

“The High Court bench has declared the Housing Levy unconstitutional for violating key provisions including singling out the formal sectors,” said Omtatah in celebration of the decision. In addition to having an effect on Ruto’s Housing project, this statement raises questions about other social welfare initiatives. The government’s proposal to create the Social Health Insurance Fund was further delayed until February 7th, 2024, by the court’s judgment which also put a hold on other legislation intended to improve social welfare.

To sum up, as the country grapples with the outcome of this court ruling, concerns arise about the future of the Affordable Housing Initiative and its comprehensive impact on President Ruto’s agenda. The Judiciary’s oversight role in safeguarding constitutional principles is evidence of the balance of power echoing the importance of adhering to legal frameworks while shaping public policies.

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