The Court of Appeal on Friday lifted orders barring the implementation of Finance Act 2023, after a successful application by Cabinet Secretary National Treasury and Planning Njuguna Ndungu, and Attorney General Justin Muturi.
A total of nine petitions have been filed challenging the constitutional validity of the Finance Act 2023 before the High Court.
The petitioners argue that the Finance Act 2023 violated various provisions of the Constitution and the PFM Act. Specifically, that it was not subjected to the concurrence of the two Speakers under Article 110 of the Constitution and that various sections of the Act that were not in the Finance Bill were sneaked into the Act without public participation.
They also claim that section 84 of the Act on the Housing Levy cannot be included in the Act, as the Finance Act must only contain measures to collect revenue to finance budget expenditure estimates, yet there are no estimates to be financed by the levy.
On 10th July 2023, the High Court in its ruling, suspended the implementation of the Finance Act 2023. On the first issue, the court found that the petitioners had satisfied the tests for grant of conservatory orders and that it was necessary to issue such orders to preserve the substratum of the petition pending the hearing and determination of the same.
However, on 11th July 2023, CS Ndungu and AG Muturi moved to court arguing that among others, the suspension of the Finance Act has the effect of halting the core operations of the Government and the government stands to suffer great financial loss in reduced revenue collection.
The duo further argued that the suspension of the Finance Act will make the government incapable of meeting its financial commitments and discharging its executive authority, and that the revenue lost by the government is irrecoverable yet the appeal has high probability of success.
“We are persuaded that the Cabinet Secretary and Attorney General have satisfied the twin principles for the grant of the orders sought, and that, public interest tilts in favour of setting aside the conservatory orders by the trial Judge,” said Court of Appeal Judges M. Warsame, Kathurima M’Inoti and H Omondi
“The upshot of our decision is that the application has merit and the same is allowed as prayed with the effect that the order made on 10th July 2023 suspending the Finance Act 2023, and the order prohibiting the implementation of the Finance Act 2023, be and is hereby lifted pending the hearing and determination of the appeal.”
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