Supreme Court suspended Court of Appeal judgement that found Finance Act 2023 unconstitutional, paving way for the government to temporarily use the Act to collect taxes.
The appeal was filed the the National Treasury Cabinet Secretary – a move that could have seen the state lose billions in revenue collection.
Kenyan banks had already reverted to the 2023 Finance Act by raising excise duty on money transfer charges to 20 percent.
The current provisions which have been reinstated by the Apex court set the excise rates at 15 percent.
Nullification of Finance Act 2023
The Court of Appeal declared the Finance Act 2023 unconstitutional in a ruling delivered July 31, 2024.
Also Read: Finance Bill 2023 proposes to tax per diem for civil servants [Video]
The 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.
“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.
