In a landmark case with significant implications for Kenyan governance, the Supreme Court has wrapped up hearings on the government's appeal against the Court of Appeal's declaration that the Finance Act 2023 is unconstitutional.

With a ruling awaited, the nation holds its breath as the judiciary ponders the future of this pivotal piece of legislation.

The Finance Act 2023 has been at the centre of a heated legal battle since the Court of Appeal’s decision on July 31, which struck down the Act due to alleged flaws in its enactment process.

The Court of Appeal, through a bench of Justices Kathurima M’inoti, Agnes Murgor, and John Mativo, found that the Act’s amendments, affecting several key tax laws, had bypassed essential public participation processes, thereby breaching constitutional requirements.

“Accordingly, we hereby issue a declaration that the enactment of the Finance Act, 2023 violated Articles 220 (1) (a) and 221 of the Constitution as read with sections 37, 39A, and 40 of the PFMA which prescribes the budget-making process, thereby rendering the ensuing Finance Act, 2023 fundamentally flawed and therefore void and consequently unconstitutional,” the court declared.

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In response to this decision, the Supreme Court has taken a cautious approach. On August 20, it issued a stay on the Court of Appeal’s ruling, recognising the potential upheaval in government operations should the Act remain void.

The Supreme Court emphasised that preserving the status quo was crucial for public interest, as any reversal of the Act's effects could pose significant challenges.

During the Supreme Court hearings, crucial arguments were put forward by both sides. Busia Senator Okiya Omutata, representing those opposed to the reinstatement of the Act, pressed for clarifications on the legislative process and citizen engagement. Meanwhile, the government defended the Act’s legitimacy robustly.

Defenders of the Act, however, were resolute.

Issa Mansour, Lead Counsel for the National Assembly and Speaker, contended that public participation had been thorough. He pointed out that the National Assembly’s proceedings were accessible through various channels, including the Bunge TV Channel, the Parliament of Kenya Facebook Page, and the National Assembly X account.

“The Chamber also has a public gallery open to any citizen to physically follow proceedings of the House,” Mansour added.

On the other hand, Professor Githu Muigai, representing the Attorney General and the Cabinet Secretary for Treasury, warned of severe consequences if the Court of Appeal’s judgement were upheld.

“The judicature should avoid radical rulings that imperil the stability of the state which is exactly what the High Court did. When you defund the state that is not a step that should be taken lightly,” Muigai cautioned.

As the Supreme Court prepares to deliver its judgement, the future of the Finance Act 2023 hangs in the balance. The decision will not only affect Kenya’s fiscal policies but also set a precedent for the legislative process and public participation in the country's governance.