High Court Extends Suspension Of Finance Act, Orders Full Trial

The High Court on Monday, July 10 refused to lift conservatory orders suspending the implementation of the Finance Act 2023.

Justice Mugure Thande ruled that the controversial act will proceed to a full trial.

The High Court further certified the matter as urgent and transmitted the petition to Chief Justice Martha Koome to constitute a three-judge bench for hearing and determination of the case.

"High Court confirms suspension of the Finance Act, 2023. Holds that Kenyans would be unfairly subjected to taxes that could be found unlawful.

"The public interest lies in suspending the Act for now. The state will not be prejudiced. The court certifies the matter for an expanded bench," stated Katiba Institute.

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

“I am inclined to exercise my jurisdiction and allow the prayer for certification under article 165- 4 of the constitution. In view of the foregoing I find that it has not been demonstrated to my satisfaction grounds warranting the setting aside of the orders of 30th of June 2023,” Justice Thande stated.

“Pursuant to article 165(4) this matter is certified as raising a substantial question of law and the file is hereby transmitted to the Chief Justice for assignment of a bench of not less than three judges to hear and determine the petition."

The respondents who included Treasury Cabinet Secretary Njuguna Ndugu 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 judge had on Wednesday, July 5 extended the orders which stop the National Treasury from implementing the controversial Act until Monday, July 10.

She heard submissions from Busia Senator Okiya Omtatah, Rarieda MP Otiende Amollo, Solicitor General Shadrack Mose, and Lawyer Githu Muigai who was representing CS Ndung'u.

Muigai had argued that the government will soon be unable to pay international commitments as well as pay salaries of government employees, accusing Omtatah of misleading the court into believing there was no consequence in extending the suspension until the petition is determined.

However, Amollo rebutted by stating that the government can still collect taxes through the use of the Finance Act 2022 which does not include contentious provisions such as the 16 per cent Value Added Tax (VAT) on Fuel and Housing Levy.

Justice Thande on Friday, June 30 issued conservatory orders suspending the Finance Act in response to a petition filed by Omtatah.

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.