In a spellbinding episode of legal drama, the Kenyan Court of Appeal stirred the pot of public policy, taxation, and constitutional law last Friday. The learned Judges made a pivotal decision, blowing away the blockade obstructing the unfolding of the Finance Act 2023. This striking turn of events was sparked by the persuasive plea from the National Treasury and Planning Cabinet Secretary, Njuguna Ndungu, and the Kenyan Attorney General, Justin Muturi.
A complex web of nine petitions had been entwined around the Finance Act 2023, fervently contesting its constitutional legitimacy in the High Court. The petitioners were firm in their conviction, asserting that the Act made a mockery of the Constitution and the PFM Act. Their main grouse revolved around the controversial claim that the Act had bypassed the mandatory approval from the two Speakers as mandated by Article 110 of the Constitution. The petitioners also took umbrage at what they saw as a sneaky addition of several sections to the Act that weren’t originally part of the Finance Bill and that had slipped past public scrutiny.
Adding fuel to the fire, critics also targeted Section 84 of the Act, which deals with the Housing Levy. The petitioners insisted that it had no place in the Act, arguing that the purpose of the Finance Act was purely to outline mechanisms for revenue collection to fund budget expenditure estimates. They were baffled by the inclusion of the levy when there were no estimates that required its financing.
The High Court initially took the petitioners’ side on July 10, 2023, stalling the wheels of the Finance Act 2023. The Court felt that the petitioners had made a convincing case for issuing conservatory orders, which were crucial to maintain the essence of the petition until its final verdict could be reached.
However, in a stunning twist the very next day, Ndungu and Muturi stormed the court with an array of arguments to overturn the suspension. They contended that the delay in implementing the Finance Act was effectively putting a stranglehold on the government’s vital operations. They warned of the catastrophic financial implications, as the suspension would inevitably lead to a sharp decline in revenue collection.
The dynamic duo didn’t stop there. They further claimed that the holdup would cripple the government’s ability to fulfill its financial commitments and exercise its executive power. They stressed the grim reality that the revenue missed by the government could never be regained, but they remained confident in their appeal’s high chances of success.
Court of Appeal Judges M. Warsame, Kathurima M’Inoti, and H Omondi sided with the Cabinet Secretary and Attorney General, agreeing that the weight of public interest leaned towards lifting the conservatory orders. They stated, “The crux of our ruling is that the appeal has merit and is hereby granted as requested. Thus, the previous order from July 10, 2023, which suspended the Finance Act 2023 and prohibited its implementation, is now officially lifted, pending the hearing and final determination of the appeal.”
