Kenyan High Court invalidates President Ruto’s payroll levy, dealing blow to fiscal plans
The Nairobi High Court in Kenya delivered a verdict on Tuesday deeming the payroll levy introduced by President William Ruto in June as illegal.
The court’s decision deals a substantial setback to the government’s fiscal objectives, as the 1.5% levy on the salaries of all Kenyan taxpayers, designed to fund a low-cost housing program, was found to lack a comprehensive legal framework. Three judges presiding over the case further criticized the levy for its discriminatory and irrational exclusion of informal workers.
Justice David Majanja issued a directive to cease the collection of fees under the Affordable Housing Act, part of a broader budget bill that introduced multiple new taxes amidst an already challenging economic backdrop marked by high inflation. The ruling comes against a backdrop of public unrest fueled by discontent over escalating prices, particularly for essential commodities such as food and fuel. Earlier this year, these grievances manifested in a series of sometimes fatal protests against President Ruto’s administration.
Kenya, a prominent player in East Africa, is contending with not only galloping inflation but also a depreciating currency, exacerbating the fiscal strain as the costs of servicing the country’s escalating debt continue to rise.
About The Author
