President Uhuru Kenyatta has in the past made promises of development to Kenyans but the development has on many occasions come at the expense of the taxpayer. However, with the way things are going, the President might have to revisit his Big 4 Agenda and make amendments to his strategy.
This is because the Employment and Labour Relations Court has today suspended the government’s plan to impose a 1.5% value added tax (V.A.T) on salaries of all employees as contribution to the National Housing and Development Fund for the Affordable Housing pillar of his Big 4 Agenda.
The orders were issued by Justice Hellen Wasilwa following a petition filed by Central Organization of Trade Unions (COTU) Secretary General Francis Atwoli who argued that there was no public participation in the plan.
“That the matter is extremely urgent as the application seeks to stop the irregular imposition of 1.5 % VAT on salaries of the employees as there was no public participation in the Amendment Act 2007 through section 86 of the Finance Act, 2018,” reads the order granted.
In the petition, COTU argued that the implementation of the 1.5% housing development levy would result in an increase in the general price levels across sectors in the country and would in turn make the lives of Kenya’s poor millions unbearable and more miserable.
Atwoli further claimed that the decision by the government to impose the said deduction is in defiance of the express decision of the union and the people of Kenya and threatens good order.
“The petitioner is opposed to the proposed amendments due to the fact that they don’t promote good governance, accountability and transparency,” claims Atwoli.
The COTU Secretary General said that over-taxation should not be the fall back whenever the government is unable to meet its budget targets.
“Stop the theft of public money and recover stolen public money and properties to plug gaps in the national Budget,” reads court documents.
Cabinet Secretaries for National Treasury, Transport and Infrastructure and the Attorney General have been named as respondents in the case, with Federation of Kenya Employers being named as an interested party.
The implementation of the 1.5% housing development levy was to come into effect on 1st of January 2019.
Do you think the President Uhuru’s government will be able to achieve his affordable housing plan without taxing citizens?