The Court of Appeal in Kenya has upheld the constitutionality of the Affordable Housing Act, 2024, which allows the government to collect a 1.5% levy from citizens. A five-judge appellate panel dismissed 42 consolidated appeals challenging the legislation, which was enacted to give effect to Article 43(1)(b) of the constitution on the right to accessible and adequate housing. The appeals arose from a High Court decision that had dismissed challenges to the Act.
The petitioners, including Busia Senator Okiya Omtatah and Dr. Magare Gikenyi, had argued that the law violated constitutional property rights, undermined devolution, and suffered from inadequate public participation. However, the Court of Appeal ruled that taxation for public interest does not violate individual property rights. The judges held that the Affordable Housing Act seeks to respond directly to the constitutional imperative of providing accessible and adequate housing to citizens.
The Court of Appeal panel, comprising Justices Wanjiru Karanja, Patrick Kiage, Aggrey Muchelule, Weldon Korir, and George Odunga, found that the Act's provision for a mandatory 1.5% levy is legally sound. The judges also ruled that setting up distinct tax collection mechanisms for formal and informal workers does not constitute unconstitutional discrimination. Furthermore, the court confirmed that the Commissioner General of the Kenya Revenue Authority holds the proper legal authority to collect the levy as an agent of the state.
The government had argued that Articles 209 and 210 of the Constitution mandate the national government to impose taxes on the people, and the housing levy is a tax. The respondents maintained that collecting the levy through an act of Parliament is a lawful exercise of the state's taxation powers meant to fulfill a valid public purpose. They cited Section 5 and Section 11 of the Kenya Revenue Authority Act, which explicitly establish the KRA as an official government agent tasked with the administration, collection, and receipt of state revenue.
The petitioners had claimed that the levy unfairly targets formal-sector workers, but the government argued that different collection mechanisms for formal and informal earners do not constitute illegal discrimination. The respondents also insisted that Parliament fulfilled all constitutional requirements for public engagement, citing nationwide public consultations, newspaper advertisements, stakeholder hearings across 19 counties, and the submission of written and oral memoranda during the drafting of the Affordable Housing Act, 2024.
The Court of Appeal dismissed all challenges and upheld the constitutionality of the Act, confirming that the mandatory 1.5% levy is legally sound. The judges stated that public participation is not a static or mechanical exercise and that Parliament demonstrated meaningful engagement, nationwide stakeholder consultancies, and procedural compliance. The court's decision clears the path for the government to continue collecting the levy.
The Affordable Housing Act, 2024, aims to provide accessible and adequate housing to citizens, as enshrined in Article 43(1)(b) of the constitution. The Act's implementation will rely on the collection of the 1.5% levy, which the court has ruled is constitutional. The government's efforts to provide housing will be boosted by the court's decision, which has upheld the levy as a lawful exercise of the state's taxation powers.
Key points
- The Court of Appeal has upheld the constitutionality of the Affordable Housing Act, 2024, allowing the government to continue collecting a 1.5% levy from citizens.
