Kenya: court overturns unpopular payroll levy

A Kenyan court ruled on Tuesday that a salary levy introduced by President William Ruto in June was illegal, dealing a major blow to the government's aim of bolstering the state coffers.

A law allowing a 1.5% levy on the salaries of all Kenyan taxpayers, including employers, was passed in June to finance a low-cost housing programme.

Three judges of the Nairobi High Court ruled that the measure was not part of a complete legal framework and that the exclusion of informal workers was "discriminatory and irrational".

"An order has been made prohibiting the collection of (...) the fees known as the Affordable Housing Act", said Justice David Majanja.

The levy was part of a budget bill that introduced many new taxes for Kenyans, against a backdrop of already high inflation.

Anger over rising prices, particularly for basic necessities such as food and fuel, led to a series of sometimes deadly protests against William Ruto's government earlier this year.

Kenya, the powerhouse of East Africa, is plagued by galloping inflation and a plummeting currency, which has caused the cost of repaying its debt to soar.