The Supreme Court of Kenya issued a stay of execution against the Court of Appeal’s judgment that declared the 2023 Finance Act unconstitutional in its entirety. The seven-judge bench underscored the importance of this stay by pointing out public interest concerns and the necessity for the input of the nation’s highest court in evaluating the implications of the lower court’s ruling.
In its deliberation, the Supreme Court examined whether the conditions for issuing a stay of execution and conservatory orders were satisfied, assessing them against the framework set in the Gatirau Munya case. The court emphasized that the appeal was far from frivolous and would become inconsequential if the stay was not granted since the Court of Appeal had nullified the Finance Act 2023 in its entirety, unlike the initial High Court decision that only struck down certain sections.
A significant consideration for the Supreme Court was the public interest, particularly the potential economic fallout. It noted that nullification of the Finance Act 2023 could lead to a loss of 214B Kenyan shillings in revenue. Moreover, updating the revenue collection systems to align with those under the Finance Act 2022 would entail considerable time and effort. Additionally, the Kenya Revenue Authority would be compelled to refund taxes collected under the 2023 act, for which no refund allocations currently exist.
This development follows the rejection of the 2024 Finance Bill by the president, who referred it back to the National Assembly. Subsequently, the Court of Appeal declared the 2023 Finance Act unconstitutional due to inadequate public participation processes, reverting the legal framework for tax collection to the Finance Act 2022. The Supreme Court’s stay orders will allow the 2023 Finance Act to continue as the operative tax collection law while the appeal is heard.
This ruling raises critical questions about the Supreme Court’s alignment with constitutionalism versus adherence to the ruling government’s agenda. Legal observers are watching closely as this case unfolds, considering the weight of its implications on Kenya’s fiscal policy and governance. For a detailed exploration, visit the original article on JURIST.