The Supreme Court has issued a suspension of the Court of Appeal’s decision that declared the Finance Act 2023 unconstitutional.
In its ruling, the Supreme Court criticized the appellate court’s judgment, noting the potential disruption to government operations and revenue measures if the Act were to be deemed unconstitutional.
The Court emphasized that the public interest favors keeping the Finance Act in effect during the appeal process, as reversing its effects later might be impractical if the appeal is successful.
The Supreme Court’s ruling included a conservatory order that halts the enforcement of specific declarations from the Court of Appeal’s judgment dated July 31, 2024, in Civil Appeals Nos.
E003, E016, E021, E049, E064, and E080 of 2024 (Consolidated) until the consolidated appeal is resolved.
The Supreme Court acknowledged its authority to issue such interlocutory orders, unlike the Court of Appeal, which had refused to stay the execution of the High Court’s judgment on the issue.
This suspension aims to maintain stability in the budget and appropriation process.
The suspension will remain in place until the consolidated appeal is heard and decided, with the hearing scheduled for September 10.
The Court of Appeal had previously ruled in July that the Finance Act 2023 was unconstitutional due to procedural flaws in its enactment.
A three-judge bench, comprising Justices Kathurima M’Inoti, Agnes Murgor, and John Mativo, found that amendments to various tax laws including the Income Tax Act,
Value Added Tax Act, Excise Duty Act, Retirement Benefits Act, and Export Processing Zones Act were made without proper public participation, violating constitutional requirements.
The Supreme Court’s ruling provides a significant reprieve for President William Ruto’s administration, following the withdrawal of the Finance Bill 2024 amid widespread protests.
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