The Employment and Labour Relations Court has 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.
The orders were issued by Justice Hellen Wasilwa following a petition filed by COTU Secretary General Francis Atwoli who argues 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.
COTU argues that the implementation of the 1.5% housing development levy will result in an increase in the general price levels across sectors in the country, and in turn make the lives of Kenya’s poor millions unbearable and more miserable.
Atwoli further claims 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 says 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.
Implementation of the 1.5% housing development levy was to come into effect on 1st of January 2019.