Consolidated appeal challenging last month judgement which declared Finance Act 2023 unconstitutional will be heard early next month.
- •The Supreme Court of Kenya, weighing potential loss and uncertainty from declaring Finance Act 2023 unconstitutional, determined public interest favors issuing conservatory and stay orders.
- •The Seven Judge Bench ruling means Government can resume raising revenue guided by Finance Act 2023.
- •According to Appellants, Government was set to lose KShs 214 billion in revenue, if Treasury was forced to revert to Finance Act 2022.
“In view of public interest, we direct the consolidated appeal herein be set down for hearing within the shortest time possible,” said the SCOK Judges.
The Judges issued conservatory orders temporarily suspending portions of Appellate Court decision dated July 31, 2024, which declared Finance Act, 2023, unconstitutional on account of cited procedural flaws in its enactment.
The Finance Act 2023, legally remained in force in the current Financial Year, after National Assembly voted in agreement with the President’s reservations and recommendation to delete all Clauses of Finance Bill 2024, thereby rescinding the Bill.
The Ruling means key Government Programs will not suffer any further budget cuts other than those espoused in recently enacted Supplementary Appropriations Act 2024, which re-aligned Government spending in current Financial Year to projected Revenue collections as guided by Finance Act 2023, following collapse of Finance Bill 2024.
Among key Government services which had been ring-fenced in Supplementary Act 2024 – and which will now continue on course following Supreme Court Ruling – is hiring of Junior Secondary School (JSS) Teachers, capitation for Primary and Secondary Education, University funding for scholarships and loans as well as bursaries for Higher and Basic Education.
Further, Cabinet Secretary for National Treasury and Planning, who was one of the appellants in the consolidated Petition, told Supreme Court that invalidation of 2023 Finance Act would require Government to update all its online platforms, revenue collection systems and software to reflect relevant tax rates, tax brackets and tax treatment of various items to the legal framework in place in 2022.
The CS argued this would take time and also require fresh engagements of various software and platform providers.
This, the Petitioners cautioned, threatened to grind Government operations to a halt and hamper service delivery at the National and County Government levels.
National Assembly defended legality of enactment process of Finance Act 2023, citing among other grounds sufficient public participation prior to passage of the Bill in the House and its subsequent assent to Law by the President.
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