Kenya’s highest court postpones ruling that will invalidate the 2023 financial legislation

The 2023 finance law was declared unconstitutional by a lower court in Kenya. However, the country’s highest court suspended the ruling on Tuesday, citing the necessity of maintaining budgetary stability until the government’s appeal is considered next month.

At the commencement of each fiscal year, the government’s revenue-raising strategies, which encompass tax increases, are primarily articulated in the finance legislation, which are submitted to parliament.

Last month, the Court of Appeal issued a ruling that the Finance Act of the previous year was unconstitutional. This decision was a significant setback for the government of President William Ruto, who in June withdrew this year’s finance bill in response to youth-led protests, which were the most significant challenge of his two-year presidency.

Ruto is conflicted between the competing demands of Kenya’s impoverished citizens and lenders, including the International Monetary Fund.

In order to finance a development program and address a substantial public debt, he has contended that tax increases are justified.

“We find that public interest tilts in favor of granting conservatory and stay orders to … maintain stability in the budget and appropriation process pending the determination of this appeal,” the Kenyan Supreme Court stated in its decision.

There will be hearings on September 10 and 11 to determine the constitutionality of the 2023 law by the Supreme Court.

The government, which has been depended on the 2023 finance law to continue tax collection since Ruto withdrew this year’s measure, did not immediately respond.

Last year, opposition parties organized a series of violent street protests that resulted in the 2023 version being challenged in court.

The government of Ruto implemented a housing tax, doubled the value-added tax on petroleum, and increased the highest personal income tax rate in accordance with the 2023 law.