A court in Nairobi has temporarily stopped the government from implementing the 1.5 per cent housing levy.

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Milimani Commercial Judge Moureen Onyango on Wednesday temporarily stopped the levy until May 20, 2019.

The Judge ordered the suit filed by the Consumer Federation of Kenya (Cofek) to be consolidated with another one filed by the Federation of Kenya Employers (FKF) before hearing on May 20.

Cofek filed the suit seeking to stop the 1.5 per cent housing levy that the government intends to deduct from salaried Kenyans in public and private sector starting next month.

In the suit papers, Cofek accused the government of rushing to make deductions without the consent of all stakeholders and mostly taxpayers.

Cofek also accused the government of disregarding the provisions of the Employment Act 2017 and also the Public Finance Act 2018.

The Consumer body further argued that the decision is ill advised and contravenes the rights of Kenyans as per Article 25 and 45 of the constitution.

It claimed that the levy is being hurriendly implemented without disclosing information to consumers and members of the public.

"The petitioner is strongly oppossed to implementation of the levy until the government fully engages stakeholders and majorly taxpayers," Cofek says in papers filed in court. 

On Tuesday, the government announced that the housing levy will take effect starting next month.

Employers will be required to deduct and submit the levy to Kenya Revenue Authority (KRA) every 9th of each month.

The deductions will be based on the employees monthly basic salary and shall not exceed Sh5,000.

Kenyans are also encouraged to make voluntary contributions of Sh200 every month to the housing scheme.

The Houisng fund levy will be used to facilitate cheap and affordable housing for Kenyans, a project that is part of President Uhuru Kenyatta's Big Four Agenda.

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