Kenya’s Supreme Court has temporarily suspended a lower court’s ruling that declared the 2023 Finance Law unconstitutional, citing the need to maintain budgetary stability until the government’s appeal is heard next month. The decision, announced on Tuesday, allows the government to continue collecting taxes under the controversial law until the case is fully reviewed.
“The public interest tilts in favor of granting conservatory and stay orders to maintain stability in the budget and appropriation process pending the determination of this appeal,” the Supreme Court stated in its ruling. The court is scheduled to hear arguments on the constitutionality of the 2023 law on September 10 and 11.
The Finance Act is crucial for the Kenyan government, as it outlines the revenue-raising measures, including tax hikes, that fund development programs and help manage the country’s significant public debt. However, the act has faced significant opposition, particularly after President William Ruto withdrew this year’s finance bill in June amid widespread youth-led protests, marking the most substantial challenge of his presidency so far.
Ruto has defended the tax increases as necessary, arguing they are essential for funding key development projects and servicing Kenya’s debt obligations. However, the Court of Appeal’s ruling that last year’s Finance Act was unconstitutional dealt a blow to his administration.
The government has relied on the 2023 Finance Law to continue its tax collection efforts following the withdrawal of this year’s finance bill, though it has yet to comment on the Supreme Court’s latest decision. The law, which doubled the value-added tax on fuel, introduced a housing tax, and increased the top personal income tax rate, has been a flashpoint of contention, sparking violent street protests led by opposition parties last year.
