Kenya court lifts suspension on controversial Finance Act News
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Kenya court lifts suspension on controversial Finance Act

A Court of Appeal in Kenya lifted the suspension on the controversial Finance Act 2023 on Friday. The High Court had previously suspended the act, arguing that without conservatory orders, the petition’s essence would be lost.

The applicants in the appeal argued that the Finance Act’s suspension would disrupt crucial government operations and cause substantial financial losses, hindering executive duties. They questioned whether a presumed constitutional statute should be suspended before its constitutionality is challenged and they challenged the High Court’s decision, citing a violation of the separation of powers doctrine. In response, the respondents asserted that the judiciary’s actions were a necessary check on the legislature and were not an overreach.

In its decision, the Court of Appeal considered the economic impact of the suspension of the Finance Act during the constitutionality review. While some provisions were set for later dates, the majority of the act was intended to take effect on July 1, 2023. The court explained:

In exercising our discretion, we are mindful of certain peculiar and unique circumstances of the Act. First, tax is a continuous and annual mechanism and the members of the public can get a rebate for overpaid taxes and levies when making subsequent tax payments. Secondly, since the petitions challenge both the entire Act and the specific provisions, the court can consider suspending the specific provisions whose implementation has an irreversible effect and cannot be refunded. This is in contradistinction with a blanket suspension of the Act. Thirdly, the Appropriation Act which was enacted on the backdrop of the Finance Act is in place and is not under constitutional challenge. Lastly, had the trial Judge considered the substantial and irreversible public interest in this matter, the court would have been hesitant to suspend the whole Act.

Considering public interests emphasized by both parties, the Court of Appeal set aside the trial judge’s conservatory orders.

The Court of Appeal’s ruling triggered mixed reactions. Phillip Etale, the opposition party’s spokesperson, expressed disappointment on X (formerly Twitter), stating that lifting the suspension would exacerbate hardships for Kenyans.