The Government can continue its rollout of Budget in line with the Finance Act, 2023. This is after the Supreme Court overturned an Appellate Court verdict that had declared the crucial law Unconstitutional.
Judges at the apex court made the decision following the success of an appeal filed by the Cabinet Secretary for National Treasury, the Attorney General and the National Assembly among other parties, challenging the July 31st 2024 Court of Appeal Judgement declaring the Finance Act 2023 Unconstitutional.
The Judgement was crucial as the Finance Act 2023, remained Constitutionally in force during the 2024/2025 Financial Year following collapse of the Finance Bill 2024.
Why Supreme Court reinstated Finance Act 2023
In the Judgement delivered by the full seven-judge Bench, Chaired by Chief Justice Martha Koome, the Apex Court ruled that the Legislative process; including public participation on the Finance Act 2023, was undertaken in accordance with the requisite Constitutional dictates.
“In particular we find that the Bill underwent the concurrence process under Article 110 (3) of the Constitution,” ruled the Judges.
They added: “The Bill being a Money Bill did not require the consideration of the Senate; and was subjected to Public Participation which was adequate and satisfactory taking into account the circumstances of enacting a Finance Act.”
Following this finding, the Seven Judge Bench found that there was no basis for the Appellate Court to declare the entire Act Unconstitutional.
Regarding queries on the Affordable Housing Levy which had been one of the grounds backing the initial Petition that led to nullification of the critical budgetary Law, the Supreme Court ruled that the impugned sections of the Finance Act 2023 “were moot;” alluding that they were subject to debate.
“Taking into account that our findings to the effect that the Court of Appeal erred in declaring the entire Act unconstitutional, the prayer for refund of taxes as sought, fails,” ruled the Supreme Court.
Summing up their judgement on the importance of the Finance Act, the Judges indicated that the focus on the People in the Budget making process must be balanced against the Government’s Constitutional mandate to facilitate and realize a strong and acceptable fiscal outlook for the economy.
The Bench Chaired by CJ Koome, also comprised Deputy Chief Justice Hon. Philomena Mwilu, Justices Mohamed Ibrahim and Smokin Wanjala, Lady Justice Martha Koome and Justice William Ouko.
The Appeal was filed by the Cabinet Secretary for Treasury and National Planning, the Attorney General, the National Assembly, Speaker of the National Assembly and the Kenya Revenue Authority.
The Appeal originated from a Petition initially filed at the High Court in 2023, by several Petitioners including Busia Senator Okiya Omutata, the Law Society of Kenya, Katiba Institute and the International Commission of Jurists (Kenya) among others.