By Judy Maina
NAIROBI — In a significant legal setback for President William Ruto, Kenya’s Court of Appeal on Wednesday ruled the government’s 2023 finance law unconstitutional, a decision that follows deadly protests and the withdrawal of this year’s finance bill.
The finance bills, typically introduced to parliament at the beginning of each fiscal year, outline the government’s revenue-raising measures, including tax hikes and new levies.
The 2023 finance bill faced vehement opposition and led to violent street protests when it proposed doubling the value-added tax on fuel, introducing a housing tax, and raising the top personal income tax rate.
“A further declaration is hereby issued that the failure to comply with this constitutional dictate renders the entire Finance Act, 2023 unconstitutional,” stated the three-judge bench of the Court of Appeal in its ruling.
This verdict follows an appeal against a previous High Court decision from late last year that largely upheld the finance bill but struck down the housing levy.
In response, the government passed a new law to continue collecting the housing tax, which is now also facing legal challenges.
The government, which has been relying on the 2023 finance law for tax collection after withdrawing this year’s bill, has yet to comment on the ruling.
Officials have not indicated whether they will appeal to the Supreme Court, the country’s highest judicial authority.
President Ruto, facing pressure from violent, youth-led protests, recently dismissed all ministers except one and has nominated a new finance minister.
He defends the higher taxes as essential for funding development programs and servicing Kenya’s substantial public debt, which exceeds levels recommended by the International Monetary Fund (IMF) and the World Bank.
The government has submitted a new economic plan to the IMF and expects the fund’s board to review it by the end of August.
The writer of this story can be reached at: judy.maina@alleastafrica.com
