The Court of Appeal declared the Finance Act 2023 unconstitutional in a ruling delivered Wednesday – July 31, 2024.
This ruling follows a petition filed by Busia Senator Okiya Omtatah and others.
The panel of judges, comprising John Mativo, Agnes Murgor, and Kathurima M’Inoti, upheld the High Court’s decision, specifically targeting sections 76 and 78 of the Finance Act 2023, which amended section 7 of the Kenya Roads Act 1999, as unconstitutional, null, and void.
“Having found that the process leading to the enactment of the Finance Act 2023 was fundamentally flawed and in violation of the Constitution, sections 30 to 38, 52 to 63, and 23 to 59 of the Finance Act 2023, stand equally vitiated and unconstitutional,” stated the court ruling.
Senator Omtatah’s case, which included over 50 respondents such as Parliament and the Speaker of the National Assembly, highlighted numerous constitutional breaches in the Act’s passage.
However, the court denied the respondents’ request to mandate the government to refund taxes collected under the invalidated sections. The judges clarified that this issue was not raised in the original petition before the High Court.
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“We uphold the finding by the High Court that the concurrence of both houses in the enactment of the Finance Act 2023 was not a requirement under Article 114,” the ruling noted.
The court further identified several sections, including 18, 21, 23, 24, 26, 32, 34, 38, 44, 47, 47, 69, 72, 79, 80, 81, 82, 83, 85, 100, 101, and 102, as unconstitutional. These sections were invalidated for not undergoing fresh public participation and for violating the constitutionally mandated legislative process.
The judges also ruled that the enactment of the Act violated Articles 220(1) and 221 of the Constitution, in conjunction with sections 37, 39A, and 40 of the Public Finance Management Act (PFMA), which outline the budget-making process. This rendered the Finance Act fundamentally flawed and therefore void and unconstitutional.
The Finance Bill, introduced to the National Assembly on June 14, 2023, and passed on June 23, 2023, included several controversial measures, such as the housing levy, which the court also deemed unconstitutional.
“The Court of Appeal agrees with our petition and invalidates the entire FY 2023/25 Finance Bill in its entirety,” said Senator Omtatah after the ruling.
