Finance Act 2023 is Constitutional – Supreme Court Rules
The Supreme Court of Kenya has reversed the Court of Appeal’s ruling regarding the 2023 Finance Bill, deeming it constitutional.
The lower courts previously determined that the Finance Act 2023 was unconstitutional due to the postponement of the 2024 version. Petitioners contended that the public participation process was improperly executed, rendering the legislation void.
However, the Supreme Court concluded that public participation regarding the Finance Act 2023 was conducted appropriately.
The Supreme Court stated, “The preliminary objection regarding this Court’s jurisdiction is overruled,” further declaring, “We hereby overturn the Court of Appeal’s determination that the entire Finance Act, 2023 is unconstitutional.”
This combined appeal addressed the legislative actions leading to the Finance Bill’s enactment, which received Presidential assent on June 26, 2023.
In its decision, the Supreme Court affirmed two findings from the Court of Appeal. The Court ruled, “We uphold the matter concerning Section 84 (Affordable Housing Levy) introduced by the Finance Act, 2023 as moot,” as determined by the Court of Appeal.
Nevertheless, the Supreme Court supported the Court of Appeal’s ruling that Sections 76 and 78 of the Act, which amend Section 7 of the Kenya Roads Act and Section 87 of the Unclaimed Financial Assets Act, are unconstitutional because they are not incidental or directly related to the money Bill.
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A total of 11 petitions were filed with the High Court by 49 respondents challenging the constitutionality of the Finance Act, of 2023.
The petitioners argued that certain provisions of the Finance Act 2023 exceeded the parameters of a Money Bill as defined in Article 114 of the Constitution.
They also highlighted that the legislative process for the bill did not receive approval from both Speakers of the National Assembly and the Senate.
The petitioners claimed that the Senate did not evaluate the Bill, even though it included matters affecting County Governments. They further argued that the law was not subjected to public participation at the devolved units, claims which the Supreme Court dismissed.
The Court of Appeal had ruled that the arguments regarding the Affordable Housing Levy and the Statutory Instruments Act were moot. Additionally, it rejected the cross-appeals as lacking merit, except for the portion in which the High Court misinterpreted its jurisdiction under Article 165, asserting it had no authority to intervene in policy issues.
The cross-appeal sought an order for the refund of all taxes collected since the enactment of the Act.
Finance Act 2023 is Constitutional – Supreme Court Rules
