In Summary

  • The High Court has made a significant decision by refusing to lift an earlier order that halted the implementation of the Finance Act, 2023.
  • Thande dismissed the state's application seeking to set aside the order suspending the act, highlighting that the state did not provide sufficient reasons to warrant the lifting of the orders.
  • Treasury Cabinet Secretary Njuguna Ndung'u, in his application to the court, urged the lifting of the orders, warning that failure to do so would lead to a budgetary crisis for the government.

The High Court has made a significant decision by refusing to lift an earlier order that halted the implementation of the Finance Act, 2023.

In a ruling delivered on Monday afternoon, Justice Mugure Thande agreed with the petitioners that the case raises substantial constitutional issues, ensuring that the matter will now proceed to Chief Justice Martha Koome to constitute a bench for a thorough hearing and determination.

Senator Okiya Omtatah, who filed the petition to stop the implementation of the new law, achieved an early victory with this ruling.

The State, however, expressed concerns over the repercussions of the order on the functioning of the three arms of government in the interim.

It argued that the order throws the State into a state of limbo, potentially affecting revenue mobilization and expenditure approval.

In response to the State's concerns, lawyer Otiende Amollo, representing the defence, disagreed and emphasized that the government has not shut down since the suspension of the Finance Act 2023.

"It is already 12 days since you suspended Finance Act 2023 and the government has not shut down. Our colleagues should stop scaremongering. The law provides for mechanisms of continuity through Finance Act 2022. All that has stopped are the new taxes," Otiende stated.

Thande dismissed the state's application seeking to set aside the order suspending the act, highlighting that the state did not provide sufficient reasons to warrant the lifting of the orders.

Consequently, the order has been extended until the case is heard and determined by the court.

Additionally, the judge has forwarded the file to the Chief Justice to assemble a bench of judges for the hearing of the petition.

Last week, the High Court in Nairobi extended the orders in response to the case filed by Okiya Omtatah and Otiende.

The duo argued that the extension of the orders would not cause any harm to the state, while also claiming that certain sections of the Finance Act 2023 threaten fundamental rights such as access to justice and the right to property.

Treasury Cabinet Secretary Njuguna Ndung'u, in his application to the court, urged the lifting of the orders, warning that failure to do so would lead to a budgetary crisis for the government.

He highlighted that since the orders were issued on June 30, the government has been losing approximately Sh578 million in taxes daily.

The decision by the High Court to maintain the suspension of the Finance Act, 2023 marks a significant development in this ongoing legal battle.

With the case now set to be heard by a bench of judges, the constitutional concerns raised by the petitioners will be subjected to careful examination, ensuring a fair and thorough assessment of the matter at hand.