By Lucy Adautin
Kenya’s highest court on Tuesday put a hold on a lower court’s ruling from late last month, which had declared the 2023 finance law unconstitutional.
Finance bills, typically introduced to parliament at the beginning of each financial year, serve as the government’s primary tool for outlining revenue-raising strategies, including tax increases and new levies.
The Court of Appeal’s decision, deeming last year’s finance act unconstitutional, delivered another setback to President William Ruto’s administration, which had already withdrawn this year’s finance bill following deadly protests.
“A conservatory order is hereby issued suspending and staying the declarations… issued in the Court of Appeal judgment,” Kenya’s Supreme Court said in Tuesday’s ruling.
The Supreme Court’s decision stems from multiple considerations, including the potential repercussions of the Court of Appeal’s ruling on government operations and revenue collection.
The court also emphasized the importance of maintaining stability in the budgeting and appropriation processes while the appeals are under review.
This ruling permits the government to continue collecting taxes under the Finance Act 2023 for now.
However, the Act’s future remains uncertain, with the Supreme Court’s final ruling expected to have far-reaching effects on the country’s tax system and legislative procedures.
The consolidated appeals will be heard by the Supreme Court on September 10 and 11, 2024.
This decision is highly anticipated by legal experts, policymakers, and the public.
For taxpayers, this means that the taxes introduced under the Finance Act 2023 will remain in effect temporarily.
This is due to the Supreme Court suspending the Court of Appeal’s ruling that had declared the entire Act unconstitutional.
Nevertheless, the future of these taxes is still in limbo, pending the Supreme Court’s final decision on the consolidated appeals.
The Court’s final ruling will decide whether these taxes are constitutional and can continue to be enforced.
If the Supreme Court upholds the Court of Appeal’s decision, it could have major consequences for government revenue and public spending.
