The Supreme Court of Kenya has suspended and stayed a ruling by Court of Appeal that declared the Finance Act 2023 unconstitutional.
This means that the government can temporarily use provisions of the Act to collect taxes pending hearing and determination of an appeal filed before the apex court.
While issuing the ruling, Supreme Court Judges led by Chief Justice Martha Koome ruled that the consolidated appeals will be set for hearing virtually on September 10 and 11.
Moreover, the consolidated appeal will be mentioned before the Deputy Registrar of the Court for purposes of ensuring compliance with earlier directions on filings.
“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,” the ruling read in part.
Also Read: Another Blow to Govt as Court Rules on Finance Act 2023
Supreme Court Gives Reason for Ruling
In the ruling, the Supreme Court said that public interest tilted in favor of the ruling.
Further, she explained that there was need to maintain the stability in the budget and appropriation process.
“We find that public interest tilts in favor of granting conservatory and stay orders to preserve the substratum of the consolidated appeal and maintain stability in the budget and appropriation process pending the determination of this appeal,” added the ruling.
Additionally, the ruling noted that challenges may arise in the operations of the two levels of governments if the entire Finance Act 2023 was to be declared unconstitutional.
“On our part therefore, taking into account the uncertainty regarding the revenue raising measures and difficulty that may arise in the operations of the two levels of governments as posited by the applicants,” the judges held.
“We are persuaded that the consolidated appeal may be rendered nugatory. Besides, prima facie, we are not convinced that the consequences of such a declaration would be reversible should the consolidated appeal be successful.”
Also Read: Win for Ruto as Supreme Court Dismisses Finance Act Case
Earlier Ruling on the Finance Act 2023
On Wednesday, July 31, the Court of Appeal ruled that the process followed in passing the Finance Act 2023 was flawed
The Appellate Court stated 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 Public Finance Management Act (PFMA) which prescribes the budget making process.
“We uphold the finding by the High Court that concurrence of both houses in the enactment of the Finance Act, 2023 was not a requirement under Article 114,” reads part of the ruling.
“Having found that the process leading to the enactment of the Finance Act, 2023 fundamentally flawed and in violation of the Constitution, sections 30 to 38, 52 to 63 and 23 to 59 of the Finance Act, 2023 stand equally vitiated and therefore unconstitutional.”
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