Kenya’s Supreme Court on Tuesday suspended a lower court’s decision that declared the 2023 Finance Law unconstitutional. The suspension aims to maintain budget stability until the government’s appeal is heard next month.
The finance laws, presented to parliament annually, are crucial for outlining the government’s revenue-raising strategies, including tax increases. The Court of Appeal’s recent ruling that the 2023 Finance Act was unconstitutional delivered a significant setback to President William Ruto’s administration. Ruto had already withdrawn this year’s finance bill in June, following widespread youth-led protests, marking the most significant challenge of his presidency so far.
Caught between the needs of Kenya’s financially strained citizens and the demands of international lenders such as the International Monetary Fund, Ruto has defended the tax hikes as necessary to fund development programmes and manage the country’s heavy public debt.
In its ruling, the Supreme Court stated, ‘We find that public interest tilts in favour of granting conservatory and stay orders to maintain stability in the budget and appropriation process pending the determination of this appeal.’ The court’s decision allows the government to continue collecting taxes under the 2023 Finance Law until the case is resolved.
The Supreme Court is set to hold hearings on September 10 and 11 to determine whether the 2023 law is constitutional. The government, which has been relying on the 2023 law for tax collection since the withdrawal of this year’s bill, has not yet commented on the court’s latest ruling.
The 2023 Finance Law has been a point of contention, particularly after last year’s violent protests led by opposition parties. The law included measures to double the value-added tax on fuel, introduce a housing tax, and raise the top personal income tax rate, all of which have sparked significant public debate.
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