Court Lifts Suspension Of Finance Act 2023

The Court of Appeal has lifted conservatory orders barring the implementation of the Finance Act 2023.

The ruling was delivered by Justice Mohammed Warsame on Friday, July 28, pending the hearing and determination of the appeal.

"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 July 10, 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. Costs shall abide the outcome of the appeal," read part of the ruling.

Justice Warsame ruled that the appeal filed by Treasury Cabinet Secretary (CS) Njuguna Ndung'u has merit.

The Judiciary building in Nairobi. /FILE

The respondents in the petition had sought abeyance (temporary suspension) of seven days to move to the Court of Appeal.

The respondents including CS Ndung'u and the Attorney General's office had argued that the Legislature, Executive and Judiciary would face uncertainty during the time the Finance Act 2023 would remain suspended.

It was further argued that the orders which suspended the implementation of the Finance Act 2023 would likely cripple the government in relation to revenue mobilisation and expenditure approval, thus the respondents' prayer to the High Court to exercise its secondary jurisdiction and suspend the conservatory orders.

The petitioners led by Busia Senator Okiya Omtatah however argued that the reimbursement of taxes which the respondents had given an example of that can be implemented for employees at the payroll is impossible, citing instances of the 16 per cent Value Added Tax (VAT) on fuel.

The judge thus indicated in discretion that certain provisions whose implementation has an irreversible effect and cannot be refunded can be considered for suspension by the court, but not the whole act.

"The Appropriation Act which was enacted on the backdrop of the Finance Act is in place and is not under constitutional challenge. Lastly, had the trial Judge considered the substantial and irreversible public interest in this matter, the court would have been hesitant to suspend the whole Act.

"In conclusion, we are persuaded that the applicants 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," added the ruling.

Justice Mugure Thande of the High Court extended the conservatory orders suspending the Finance Act 2023 on July 10, 2023, in response to Omtatah's petition.

Omtatah had moved to the High Court to challenge the contentious Act before it was assented into Law by President William Ruto, arguing that the bill which generated uproar across the country is unconstitutional and thus sought the help of the court.

Following the latest ruling, the fate of the Finance Act lies on the highest court in the country, the Supreme Court of Kenya, which will determine the case through a three-judge bench constituted by Chief Justice (CJ) Martha Koome.

Justice David Majanja will be the judge to preside over this case, thus taking the lead in terms of overseeing the proceedings and will be supported by Justice Lawrence Mogambi and Justice Christine Meori.