Supreme Court suspends CoA judgement declaring Finance Act 2023 unconstitutional » Capital News
NAIROBI, Kenya, Aug 20 – The Supreme Court has suspended the Court of Appeal’s judgment declaring Finance Act 2023 unconstitutional.
The Supreme Court in its ruling faulted the appellate court, highlighting the uncertainty surrounding the revenue measures and the difficulties that could arise in government operations if the Act remained unconstitutional.
The Court emphasized that public interest tilted in favor of maintaining the Finance Act in force pending the appeal, as reversing its effects later might not be feasible if the appeal succeeded.
”A conservatory order is hereby issued suspending and staying the declarations in Orders iii, iv, vi, vii & ix(i) issued in the Court of Appeal judgment dated 31st July, 2024 in Civil Appeals Nos. E003, E016, E021, E049, E064 & E080 of 2024 (Consolidated) pending the hearing and determination of the consolidated appeal before this Court,” read the ruling by the supreme court in part.
Likewise, the Supreme Court also acknowledged that, unlike the Court of Appeal, which had refused to stay the execution of the High Court’s judgment on the matter, it was within its discretion to issue interlocutory orders on a case-by-case basis.
This suspension aims to preserve the substratum of the consolidated appeal and ensure stability in the budget and appropriation process.
The apex court in its ruling directed that this suspension will remain in effect until the hearing and determination of a consolidated appeal scheduled for September 10.
Court of Appeal had in July declared the Finance Act 2023 unconstitutional due to flaws in its enactment process.
A three-judge bench comprising Justices Kathurima M’inoti, Agnes Murgor, and John Mativo found that the amendments made to various tax laws—such as the Income Tax Act, Value Added Tax Act, Excise Duty Act, Retirement Benefits Act, and Export Processing Zones Act—post-public participation were unconstitutional.
The judges argued that these amendments were not subjected to fresh public participation, thus violating constitutional provisions.
“Accordingly, we hereby issue a declaration that the enactment of the Finance Act, 2023 violated Articles 220 (1) (a) and 221 of the Constitution as read with sections 37, 39A, and 40 of the PFMA which prescribes the budget-making process, thereby rendering the ensuing Finance Act, 2023 fundamentally flawed and therefore void and consequently unconstitutional,” Justices Kathurima M’Inoti, Agnes Murgor and John Mativo said on Wednesday, July 31.
The rolling by the Apex court therefore comes as a big reprieve for President William Ruto’s administration following the withdrawal of the Finance Bill 2024 after the deadly gen-Z demonstrations.
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