Nairobi — The Law Society of Kenya (LSK) has moved to court to stop the implementation of the Finance Act 2023.
In its suit papers, the body is further seeking orders compelling the Kenya Revenue Authority (KRA) from collecting the Housing Levy.
Through its advocate Noel Okwach, LSK contends that the Act is unreasonable as it introduces a “mandatory affordable housing levy pursuant to Section 84 of the Finance Act 2023.”
It stated that its implementation threatens the social economic interests of Kenyans against the principle of social justice.
LSK also argued that the constitution explicitly provides that “every state organ including Parliament and the Executive shall perform its functions only in accordance with the Constitution.”
“Similarly, any law enacted by any legislative body which is inconsistent with or in
contravention of the Constitution is null and void.”
It stated that the power to tax is very delicate, vulnerable to abuse by those in authority; therefore, the Constitution imputes safeguards to protect against such abuse.
“The process of enactment of the impugned legislation was fraught with
blatant procedural and substantive illegalities. The Respondents intentionally made a mockery of the process of public participation which led to the enactment of an
unfair, unsustainable and illicit legislation.”
The Court of Appeal lifted a conservatory order on the Finance Act, paving the way for its implementation.
This was a major reprieve for President William Ruto whose government was facing challenges on spending since the new financial year started this month.
Justices Mohamed Warsame, Kathurima M’inoti and Hedwig Omondi observed that there will be irreversible economic consequences if the order is not lifted.
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“The upshot of our decision is that the application has merit and the same is allowed as prayed with the effect that the order made on 10th July 2023 suspending the Finance Act 2023, and the order prohibiting the implementation of the Finance Act 2023, be and is hereby lifted pending the hearing and determination of the appeal,” the judges ruled Friday.
The judges, however, allowed the appeal by Treasury Cabinet Secretary Njuguna Ndungu who said the suspension of the Act was affecting government operations.
The judges have ruled that the act cannot be suspended indefinitely given the effects it will have on taxation and government spending that is already crippled.
In their ruling, the judges, however, said all the parties shall abide by the final outcome of the appeal.
The order suspending the Finance Act was obtained by activist Okiya Omtatah who filed a case in the High Court, describing it as punitive on Kenyans since it seeks to raise taxes that will raise the cost of living.
