Supreme Court Rules On Finance Act 2023, Terms It Constitutional

The Supreme Court of Kenya has ruled that the Finance Act 2023 is constitutional, overturning a previous judgment from the Court of Appeal that had declared the Act unconstitutional. 

This decision marks a significant turn in the legal battle surrounding the Act, which has been highly debated since its enactment on June 26, 2023.

The initial challenge to the Finance Act 2023 was based on claims from petitioners who argued that it did not follow the required legal procedures. 

They claimed that public participation—a crucial step in the legislative process—was not fully conducted.

 Additionally, they argued that the Act addressed matters relevant to county governments and, therefore, required approval from both the National Assembly and the Senate. 

This concern was especially critical as the petitioners believed the Senate did not give the necessary concurrence, which is required when legislation affects county governments.

However, the Supreme Court disagreed with the petitioners on the issue of public participation. 

The Court found that the Finance Act 2023 had followed due process, and public input had been sufficiently gathered before the Act became law. 

This verdict also addressed the Court’s authority, as it dismissed objections raised regarding its jurisdiction to rule on the Act.

In a balanced decision, the Supreme Court also upheld two specific rulings from the Court of Appeal. 

First, it declared that the Affordable Housing Levy, included in the Act, was moot, meaning it did not need further judicial examination. 

Additionally, the Court found sections 76 and 78 of the Act, which amended the Kenya Roads Act and the Unclaimed Financial Assets Act, unconstitutional. 

The Court noted that these sections did not directly relate to the purpose of a Money Bill and were, therefore, not legally justified in the Finance Act.

This ruling concluded a consolidated appeal involving 11 different petitions from 49 respondents, each challenging various aspects of the Finance Act 2023.

 Petitioners had also requested a refund of all taxes collected under the Act; however, this was not granted by the Court.

The Supreme Court’s verdict not only affirms the validity of the Finance Act 2023 but also clarifies critical aspects of legislative requirements in Kenya, particularly concerning public participation and the scope of Money Bills.