Kenya’s top court on Tuesday temporarily halted a lower court’s decision that deemed the 2023 finance law unconstitutional, stating that it was crucial to maintain budgetary stability until the government’s appeal is considered next month.
The finance bills, introduced to parliament at the beginning of each financial year, are the primary method by which the government outlines its revenue-raising strategies, including proposed tax increases.
The Court of Appeal’s ruling last month that the previous year’s Finance Act was unconstitutional dealt a significant blow to President William Ruto’s administration, which withdrew this year’s finance bill in June amid youth-led protests the most significant challenge of his two-year tenure.
Ruto has been caught between the conflicting demands of Kenya’s struggling citizens and international lenders such as the International Monetary Fund.
He has asserted that raising taxes is essential to fund development projects and service the country’s substantial public debt.
“We determine that the public interest favours granting conservatory and stay orders to … sustain stability in the budget and appropriation process pending the outcome of this appeal,” Kenya’s Supreme Court stated in its ruling.
The Supreme Court will hold hearings on 10 and 11 September to assess whether the 2023 law is constitutional.
The government, which has been relying on the 2023 finance law to continue tax collection after Ruto withdrew this year’s bill, did not immediately respond to the ruling.
The 2023 version faced a legal challenge after a series of violent street protests last year, led by opposition parties.
Ruto’s administration utilised the 2023 law to double the value-added tax on fuel, introduce a housing levy, and increase the top personal income tax rate.
Reuters
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