The High Court has issued staying orders on its judgement on the Finance Act 2023 until January 10, 2024.
According to the court, the move would enable the government to file an appeal against the judgement.
Notably, this means that the Kenya Revenue Authority (KRA) will continue deducting the housing levy from salaried Kenyans until the said date.
The decision followed a prayer to the court by KRA, through its Lawyer Ochieng Gaya, sought 45 days stay from the court over the ruling made that determined that the Finance Act 2023, and housing levy deductions is unconstitutional.
According to KRA, it was not in a position to refund money that had been deducted through taxes because of the systems that had been put in place when the deductions were being made.
Gaya was speaking before a three-judge bench comprising Justices David Majanja, Christine Meoli and Larwrence Mugambi who delivered the ruling on Tuesday, November 28.
“That pronouncement places us in a very awkward situation because we not only collect the housing fund but there are also other agencies so we will be seeking that pronouncement to be stayed.
“One, KRA as clearly captured in the judgement had issued a system adjustment and a public notice and this system adjustment, we are all aware that the pay is being collected together with the housing fund. That system adjustment will require time for it to be readjusted,” stated Gaya.
Also Read: Court Declares Housing Levy Unconstitutional
KRA Pleads with the Court Over Lawsuits
At the same time, KRA stated that they would be subjected to multiple lawsuits because of the ruling made, for illegally collecting funds.
It asked that it is given more time to determine a way forward on the matter adding that if anything, refunds should be made by the ministry of lands.
“Secondly, this judgement places KRA at a position where it will be subject to suits for illegally collected funds and we will need a stay order to prevent refund claims which shall be made.
“KRA finds itself in a position where it can only refund taxes under the statute this having declared to be outside statute, we will be subjected to damages suits.
Also Read: Govt Says Housing Levy Will Improve Development
Why 45 Days After Housing Levy Ruling?
Explaining why the authority required 45 days and not more or less, lawyer Gaya stated that the number of days were sufficient time for the authority to rework its systems.
He also explained that salaries for the month of November had already been processed and the levy had already been deducted.
Notably, KRA stated that it normally requires 30 days to make a decision in cases where individuals or entities applied for a refund.
“They can claim the refunds from the ministry of lands, but we seek from our side we don’t have a mandate and a remedy in a way we shall cover these taxes. With that I seek 45 days stay
“KRA has 30 days to make a decision on applications for refund therefore 45 days will give KRA sufficient time to make a decision on the matter,” he added.
