Salaried Kenyans are staring at double taxes in August should the Court of Appeal allow the implementation of the Finance Act 2023.
The Court will Friday, July 28, deliver its verdict on the case filed by National Treasury Cabinet Secretary (CS) Njuguna Ndung’u pleading with the court to lift the order blocking the implementation of the piece of legislation.
CS Ndung’u in his petition stated that the government is facing challenges financing the budget due to the court banning the application of Finance Act.
President William Ruto’s government is banking on the law to raise Ksh.200 billion through taxes to finance its inaugural budget of Ksh.3.6 trillion.
If the court lifts the order, the Kenya Revenue Authority (KRA) will apply the Finance Act as previously stated.
Therefore, sections which were to be applied from July 1 like the 1.5% housing levy on gross income and 32.5% tax for people earning between Ksh.500,000 and Ksh.800,000 and a 35% for those earning above Ksh.800,000 will be implemented and backdated.
This would mean that KRA will collect the July taxes in August even though this month payments have already been made.
As KRA plans to collect the new taxes next month, this would mean salaried employees will incur more deductions in their August pay slips and earn less.
The taxman has already rolled out the system to affect the double deductions if the Court of Appeal quashes the order suspending the implementation of the Act.
If the Finance Act 2023 is implemented, individuals earning Ksh.800,000 will take home Ksh.548,988 down from the current Ksh.565,416.
On the other hand, those with a gross salary of Ksh.600,00 will earn Ksh.413, 943 a reduction by Ksh.11,473 because of the two provisions.
On July 30, the High Court suspended the implementation of the Finance Act after a case challenging the Act was filed by Busia Senator Okiya Omtatah and six others.
Further, the High Court dismissed a petition by the government to lift the orders and extended the suspension.
The case was transferred to the Supreme Court and Chief Justice Martha Koome named a three-judge bench constituting David Majanja, Lawrence Mogambi and Christine Meoli to hear and determine the case.