Court Of Appeal Declares Finance Act 2023 Unconstitutional

The Court of Appeal has upheld the High Court ruling that declared the controversial Finance Act 2023 unconstitutional.

In a ruling on Wednesday, July 31, Court of Appeal Judges Kathurima M'Inoti, Agnes Kalekye Murgo, and John Mativo ruled that the Finance Act 2023 was fundamentally flawed and therefore unconstitutional.

“We uphold the finding by the High Court that concurrence of both houses in the enactment of the Finance Act, 2023 was not a requirement under Article 114.

“Having found that the process leading to the enactment of the Finance Act, 2023 was fundamentally flawed and in violation of the Constitution, sections 30 to 38, 52 to 63, and 23 to 59 of the Finance Act, 2023 stand equally vitiated and therefore unconstitutional,” read the ruling in part.

The three-judge bench pointed out that the Kenyan constitutional framework calls for taxation according to the rule of law.

The trio said a tax can be levied only if a statute lawfully enacted so provides that the burden of taxation must be shared fairly, revenue raised by a tax can be used only for lawful public purposes, and if public money shall be used in a prudent and responsible way.

The Court of Appeal judges however dismissed the petitioner’s prayer seeking a refund of taxes collected by the government under the Finance Act 2024.

They noted that the prayer was not pleaded in the Petition before the High Court and that legislative enactments enjoy a presumption of constitutionality up to the moment they are found to be unconstitutional.

The ruling comes months after the Court of Appeal upheld the High Court decision declaring the levy constitutional.

In a ruling on January 26, the appellate court argued that the decision to impose the housing levy did not follow the stipulated framework.

This also comes weeks after President William Ruto declined to sign the Finance Bill 2024 into law after nationwide protests.