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Ruto Faces New Tax Challenge as High Court Declares Finance Act 2023 Illegal

President Ruto signing the Finance Bill 2023 into law at State House, Nairobi, during a previous event. [PCS]

In Summary:

1) The Court of Appeal has declared the Finance Act 2023 unconstitutional due to a flawed legislative process.

2) The court highlighted the lack of public input and improper exclusion of the Senate in the enactment process.

The Court of Appeal has declared the Finance Act 2023 unconstitutional.

The ruling, delivered in Civil Appeal No. E003 of 2023, involved the National Assembly and its Speaker versus Okiya Omtatah Okoiti and others.

“Having found that the process leading to the enactment of the Finance Act, 2023 was fundamentally flawed and in violation of the Constitution, sections 20 to 38, 52 to 63, and 23 to 59 of the Finance Act, 2023 stand equally vitiated and therefore unconstitutional,” the court ruled.

The court found that the legislative process lacked sufficient opportunities for public input, violating constitutional mandates.

It emphasized that the National Assembly must allow the public to express their views and provide clear reasons for adopting or rejecting these proposals during the legislative process.

Additionally, the Senate, a crucial legislative body, was improperly excluded from the process, violating the bicameral nature of the Kenyan Parliament, which ensures comprehensive scrutiny and representation in law-making.

The judgment also noted that several sections of the Act were introduced after the public participation phase, bypassing the proper legislative stages, further undermining the legitimacy of the law.

The government was forced to continue using the Finance Act 2023 after President William Ruto refused to assent to the Finance Bill 2024 following youth-led protests across the country.