The Court of Appeal on March 25, 2026, dismissed the Salaries and Remuneration Commission’s (SRC) appeal against a High Court ruling that nullified its 2021 decision to revoke judges’ taxable car allowance.
The five-judge bench verdict affirmed that judges are entitled to a taxable car allowance of up to Kshs 10 million, a benefit the commission sought to revoke on grounds of illegality and fiscal sustainability.
According to the commission, judges were receiving double compensation as they were already provided with official government transport or commuter allowances.
In accordance with Article 160(4) of the Kenyan Constitution 2010, the court declared the ruling on “ring-fencing” that stated the remuneration and benefits of a Judge cannot be varied to their disadvantage.
“The remuneration and benefits payable to, or in respect of, a judge shall not be varied to the disadvantage of that judge, and the retirement benefits of a retired judge shall not be varied to the disadvantage of the retired judge during the lifetime of that retired judge,” The Constitution of Kenya 2010 states.
Furthermore, the court noted that the commission had remained silent for years while judges assessed the allowance under review, only protesting in 2021.
SRC had demanded that all the sitting judges recuse themselves as they were the beneficiaries of the court ruling.
Their demand was, however, dismissed, with the court upholding the doctrine of necessity and asserting that the judges had a constitutional obligation to resolve the dispute despite being beneficiaries.
“In circumstances in which all the members of the only tribunal competent to determine a matter are subject to disqualification, they may be allowed to sit and determine the matter under the doctrine of necessity to avoid a miscarriage of justice,” the law states.
In its final orders, the court declared the SRC’s revocation letter unconstitutional, null, and void.
Additionally, a mandatory order compelling the National Treasury to continue processing and paying the taxable car allowance to Judges was issued.
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Judges’ Taxable Car Allowance
Before the 2010 Constitution, Judges were granted a duty-free car grant to purchase a private motor vehicle.
“It was deposed that section 13(2) of the Income Tax Act allowed the Minister for Finance to grant tax exemption, and it was on that basis that Judges, among other constitutional officer holders, were exempted from paying tax when purchasing vehicles,” part of the Court judgement read.
Following the promulgation of the new Constitution, which obligated all State officers to pay tax on benefits under Article 210(3), the Head of Public Service issued a circular on July 7, 2011.
This circular legally transitioned the duty-free facility into a taxable car allowance, initially capped at Kshs 2 million.
Subsequent reviews by the Head of Public Service in 2015 and 2018 increased this allowance, setting the maximum at Kshs 10 million.
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SRC petition on Revoking the Taxable Car Allowance
A three-judge bench, comprising Justices Chacha Mwita, Lawrence Mugambi, and Patricia Nyaundi, reinstated the taxable car allowances in 2024.
The judges dismissed the Attorney General’s argument that the benefit ceased to exist and didn’t transition under the new constitution.
However, SRC claimed that it became aware of the reviews in 2021 and promptly issued a letter seeking to revoke the circulars.
Additionally, the commission argued that any remuneration or benefit for State officers could be set or reviewed only by the SRC under Article 230(4) of the Constitution.
