NAIROBI, Kenya – In a landmark ruling, the Supreme Court overturned a Court of Appeal decision that had declared the Finance Act 2023 unconstitutional, reinstating the controversial legislation while maintaining specific sections as invalid.
The Act, which had faced opposition since its inception, passed into law with presidential assent on June 26, 2023, but sparked a wave of petitions challenging its legislative legitimacy and alleged constitutional breaches.
The Supreme Court’s decision followed 11 petitions initially filed in the High Court, questioning the Act’s compliance with constitutional requirements for public participation and legislative procedure.
The Court of Appeal had previously ruled in favor of these petitions, voiding the Finance Act on grounds of constitutional noncompliance.
However, the Supreme Court has now rejected that finding, setting aside the judgment and re-establishing the Act’s legal standing, with some exceptions.
In its ruling, the Supreme Court identified and addressed nine critical points, examining the legislative process and the obligations of Parliament in the passage of the Finance Act.
Notably, the Court upheld two key findings from the Court of Appeal, agreeing that certain amendments were unconstitutional.
These included provisions under Sections 76 and 78, which amended the Kenya Roads Act and the Unclaimed Financial Assets Act, respectively.
The Court agreed that these changes were neither incidental nor directly connected to a money bill and, thus, did not belong in the Finance Act.
Among the issues reviewed was the Affordable Housing Levy introduced under Section 84 of the Act.
The Supreme Court concurred with the Court of Appeal’s position that this issue was moot, though the section’s constitutionality was contested widely in the public and legislative spheres.
One of the central arguments from petitioners was that significant amendments had been made to the Finance Bill after the initial public participation phase, potentially contravening public input rights under the Constitution.
The Court of Appeal had ruled that the introduction of 21 new sections post-public participation was unconstitutional, demanding fresh public involvement in line with constitutional mandates.
The Supreme Court did not overturn this finding but refrained from ordering a tax refund for funds collected under the disputed provisions, noting that the prayer had not been initially requested in the High Court.
This ruling has deepened debates over legislative accountability, with the Court underscoring Parliament’s constitutional duty to disclose reasons for adopting or dismissing public feedback during legislative reviews.
The Supreme Court also scrutinized the process outlined under Article 110(3) of the Constitution, which mandates concurrence between both parliamentary houses when determining the nature of legislation and amendments.
The Supreme Court dismissed several cross-appeals filed by specific respondents in the case, ruling that each party in the consolidated appeals would bear its own legal costs.
The Act, which had faced opposition since its inception, passed into law with presidential assent on June 26, 2023, but sparked a wave of petitions challenging its legislative legitimacy and alleged constitutional breaches.
The Supreme Court’s decision followed 11 petitions initially filed in the High Court, questioning the Act’s compliance with constitutional requirements for public participation and legislative procedure.
The Court of Appeal had previously ruled in favor of these petitions, voiding the Finance Act on grounds of constitutional noncompliance.
However, the Supreme Court has now rejected that finding, setting aside the judgment and re-establishing the Act’s legal standing, with some exceptions.
In its ruling, the Supreme Court identified and addressed nine critical points, examining the legislative process and the obligations of Parliament in the passage of the Finance Act.
Notably, the Court upheld two key findings from the Court of Appeal, agreeing that certain amendments were unconstitutional.
These included provisions under Sections 76 and 78, which amended the Kenya Roads Act and the Unclaimed Financial Assets Act, respectively.
The Court agreed that these changes were neither incidental nor directly connected to a money bill and, thus, did not belong in the Finance Act.
Among the issues reviewed was the Affordable Housing Levy introduced under Section 84 of the Act.
The Supreme Court concurred with the Court of Appeal’s position that this issue was moot, though the section’s constitutionality was contested widely in the public and legislative spheres.
One of the central arguments from petitioners was that significant amendments had been made to the Finance Bill after the initial public participation phase, potentially contravening public input rights under the Constitution.
The Court of Appeal had ruled that the introduction of 21 new sections post-public participation was unconstitutional, demanding fresh public involvement in line with constitutional mandates.
The Supreme Court did not overturn this finding but refrained from ordering a tax refund for funds collected under the disputed provisions, noting that the prayer had not been initially requested in the High Court.
This ruling has deepened debates over legislative accountability, with the Court underscoring Parliament’s constitutional duty to disclose reasons for adopting or dismissing public feedback during legislative reviews.
The Supreme Court also scrutinized the process outlined under Article 110(3) of the Constitution, which mandates concurrence between both parliamentary houses when determining the nature of legislation and amendments.
The Supreme Court dismissed several cross-appeals filed by specific respondents in the case, ruling that each party in the consolidated appeals would bear its own legal costs.
