Court of Appeal Declares Finance Act 2023 Unconstitutional

The Court of Appeal has declared the Finance Act 2023 invalid, stating that the process leading to its enactment was flawed.

Justices Kathurima M’inoti, Agnes Murgor, and John Mativo ruled that the various sections introduced after public participation to amend the Income Tax Act, Value Added Tax Act, Excise Duty Act, Retirement Benefits Act, and Export Processing Zones Act were unconstitutional, as they were not subjected to fresh public participation.

“Having found that the process leading to the enactment of the Finance Act 2023 was 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 there unconstitutional,” read part of the court ruling.

The case was filed by Busia Senator Okiya Omtatah, with over 50 respondents listed, including Parliament and the Speaker of the National Assembly.

In their ruling, the judges denied a request from the respondents to have the government refund taxes collected under several sections of the Act. The judges stated that this request was denied because it was not pleaded in the petition before the High Court and was therefore improperly before the court.

“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,” read part of the ruling.

The bill was presented before the National Assembly on June 14, 2023, and was passed on June 23, 2023. It introduced several controversial taxes, including the housing levy, which was deemed unconstitutional.

Commenting after the court ruling, Senator Omtatah emphasized that the three-judge bench invalidated the Act, which was largely opposed by Kenyans.

“The Court appeal agrees with our petition and invalidates the entire FY 2023/25 finance bill in its entirety,” he said.