Court of Appeal refuses to stay Judgment by the High Court on Housing Levy
The Court of Appeal refused to stay judgment by the High Court of Kenya which had found that sections of the law allowing collection of a 1.5% levy to fund affordable housing were unconstitutional.
According to the high court judgment delivered on 28 November 2023, three learned judges of the Court declared sections 76, 77, 78, 84, 87, 88 and 89 of the Finance Act 2023 unconstitutional and in essence stopped further collection of further housing levy.
According to advocates representing the government of Kenya, in the application for stay of the judgment at the court of appeal, it was submitted that if stay was declined, the projects commenced under the affordable housing project would stall, the anticipated revenue of 73 Billion will not be collected, and jobs would be lost, and that in the event the appeal is unsuccessful, the taxpayers will be refunded their money collected as unlawful tax.
It was submitted by parties opposing the stay of the High Court judgment that the applicants are entitled to a right to appeal but not to a right to seek extension of illegalities through interim application and that Kenya does not suffer from housing crisis.
After considering the judgment by the High Court, the applications for stay and arguments by parties, the court of Appeal held that while the appeal has good chances of success, the applicants did not demonstrate that if the stay is not granted the outcome of the appeal will not have force or effect. The Court of appeal made the following important findings:-
- The applicants did not demonstrate that it possible to backdate the taxes in the event the appeal succeeds;
- While applicants proffered the argument that that the government risks being sued for breach of contracts signed in its effort to implement the Affordable Housing Project, not even a single contract was placed the court to support the assertion;
- While applicants argued that government departments may shut down and jobs will be lost, details of the alleged jobs were not provided.
Finally, in refusing to stay ruling invalidating housing levy, the Court of appeal expressed itself as follows:-
“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. This is because if the stay sought is granted at this stage, should the appellate Court affirm the impugned decision, then some far-reaching decisions that will have been undertaken pursuant to the impugned laws may not be reversible. Public interest in our view tilts favour of in not granting the stay or the suspension sought. Public interest tilts in favour awaiting the determination of the issues raised in the intended appeals.”
If want to know more on implication of this ruling by the Court appeal, we are happy to discuss and to have your views or comments.