PS picks up the judiciary on Sh9bn’s housing fund

Economy

PS picks up the judiciary on Sh9bn’s housing fund


AUTUMN PS

Housing Principal Secretary candidate Charles Hinga. NMG PHOTO

The judiciary has been held responsible for the failure of a government plan to withhold 1.5 percent from salaries and raise Sh9 billion annually to finance low-cost housing construction.

Charles Hinga, candidate for chief housing secretary, accused the judiciary of failing to rule, despite the government being blocked from introducing the levy four years ago.

He told the National Assembly vetting panel that the courts were being used by 11 individuals to stop the government’s plan to raise money to build 500,000 housing units a year. The 1.5 percent levy was discontinued when the government collected Sh2 billion, the candidate said.

The Employment and Labor Relations Court suspended the levy in 2018 following a petition from the workers’ governing body, the Central Organization of Trade Unions (Cotu) in December. The courts suspended the levy because there was no public participation and transparency in its implementation was not guaranteed.

The deduction was included in the Finance Act, 2018, which was set to take effect January 1, 2019, despite opposition from unions and employers. “The mandatory contribution, where an employer had to pay 1.5 percent monthly and an employee 1.5 percent, was tragically stopped by 11 people,” Hinga told MPs.

“Unfortunately, the courts have never ruled on the cases filed separately in the Employment and Labor Relations Court, the Environment and Land Court and the Constitutional Review Court. The intention was purely to sabotage the roll-out of the Housing Fund.”

Mr Hinga told the Housing and Urban Planning Committee that the frustration the fund faced in court over postponements of hearings forced former President Uhuru Kenyatta to lose interest and impose the levy on a voluntary basis.

“We were forced to move away from the compulsory contribution to the voluntary contribution levy. The former president grew tired of the lawsuits. Certain groups, including the judiciary, frustrated us,” Hinga said.

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