Omtatah Leads Fresh Supreme Court Bid to Stop Kenya’s 1.5% Housing Levy

Six Kenyans led by Busia Senator Okiya Omtatah have taken the fight against the Affordable Housing Levy to the Supreme Court, seeking to stop the mandatory deductions and recover money already collected from workers.

The latest challenge puts President William Ruto’s flagship housing programme back before the courts, barely two months after the Court of Appeal upheld the Affordable Housing Act, 2024.

The petitioners want the Supreme Court to overturn the earlier decisions, declare the provisions establishing the levy unconstitutional and prohibit the Kenya Revenue Authority (KRA) from collecting it.

They are also seeking refunds of contributions already deducted from employees, arguing that Kenyans should not be compelled to finance a housing programme without a guarantee that they will benefit from it.

In their court filing, the petitioners argue that taxation must be fair and should not place a disproportionate burden on low-income earners and marginalised groups.

“Tax measures must be socially just, adequate, equitable, and progressive and must not disproportionately shift the tax burden to the poor and marginalised,” they stated.

They are asking the court to restrain the government from collecting the levy under the Affordable Housing Act.

What the petitioners want the Supreme Court to stop

The challenge specifically targets Sections 4 and 5 of the Affordable Housing Act, 2024, which establish the mandatory contributions and provide for their collection.

The petitioners want the court to declare these provisions unlawful and stop KRA from continuing to collect the money.

They also want the government to refund the contributions already taken from employees.

Beyond the deductions, the case raises questions about the use of public and community land for housing projects whose units are eventually sold to individuals.

The petitioners further argue that the public participation process before the law was passed did not adequately reflect the views of Kenyans.

These are claims the Supreme Court will have to consider against the legal findings already made by the lower courts. The filing itself does not establish that the levy is unconstitutional.

Why the latest case matters to workers

The Affordable Housing Levy is a mandatory contribution calculated on gross income.

Under the current arrangement, employees contribute 1.5 per cent of their gross monthly salary, while employers pay a matching 1.5 per cent. People earning income outside formal employment are also required to contribute 1.5 per cent of their gross income.

This means the employee's deduction is only part of the money collected. Employers make a separate contribution on top of the amount taken from workers' pay.

For example, an employee earning KSh50,000 in gross monthly salary contributes KSh750. The employer adds another KSh750, bringing the total monthly contribution linked to that employee to KSh1,500.

The money is intended to finance affordable housing developments and related infrastructure under the government's programme.

KRA remains the designated collector under the law. Its published guidance requires employers to deduct the employee's share and remit it together with the employer's contribution.

Court of Appeal had already upheld the levy

The latest move follows a significant ruling delivered by a five-judge Court of Appeal bench on September 25, 2026.

In the case of Gikenyi and five others v Cabinet Secretary for Lands, Public Works, Housing and Urban Development and 65 others, the judges dismissed the consolidated appeals challenging the Affordable Housing Act.

The appellants had questioned the constitutionality of the levy, arguing that it violated property rights, equality, devolution and the right to adequate housing.

They also challenged the use of public land, the role of the National Land Commission and the process followed in passing the law.

The Court of Appeal upheld the Act and found that the levy was a lawful way for the government to raise money towards its constitutional obligation to progressively provide adequate housing.

However, the judgment was not without criticism of the law's implementation framework.

The judges identified a procedural concern over the Commission on Revenue Allocation's opportunity to review the Bill before it was debated and passed by Parliament. They said the commission should have been involved earlier, as required by Article 205 of the Constitution.

The court nevertheless concluded that the issue did not justify striking down the entire Act and dismissed the appeals.

How the housing levy reached this point

The current legal framework followed an earlier court battle over the housing levy introduced through the Finance Act, 2023.

In November 2023, the High Court declared that earlier arrangement unconstitutional, citing defects in the way the levy had been imposed, including discrimination between formal and informal sector workers.

The government subsequently introduced a separate Affordable Housing Bill, which Parliament passed before President Ruto assented to it on March 19, 2024.

The new law established a fresh statutory framework for collecting the levy. It was then challenged through several petitions, which the High Court dismissed in October 2024.

The Court of Appeal upheld that decision in September 2026, allowing the deductions to continue.

The latest filing now seeks to take the dispute to the country's highest court.

Will the new case stop deductions immediately?

No. The filing of a case does not automatically suspend an existing law or stop KRA from collecting the levy.

The 1.5 per cent employee contribution and the matching employer payment therefore remain in force unless the Supreme Court issues orders directing otherwise or ultimately overturns the earlier decisions.

The Supreme Court will also have to consider whether the matter meets the constitutional requirements for it to hear an appeal from the Court of Appeal.

Under Article 163(4) of the Constitution, appeals to the Supreme Court are permitted as of right in cases involving the interpretation or application of the Constitution. Other appeals require certification that a matter of general public importance is involved.

The latest filing is therefore another step in a long-running dispute, not a ruling that has already changed the law.

For millions of workers, the outcome could have a direct effect on monthly deductions. For the government, it could determine the legal footing of a major funding stream for its affordable housing programme.

Until the Supreme Court makes a decision or issues interim orders, the current collection system remains in place.

About the Author

Maureen Onyango is a journalist passionate about storytelling, life coaching and spiritual lessons. She studied at the Kenya Institute of Management and enjoys telling stories that inform, inspire and empower communities.