Kenya’s Supreme Court Revives 2023 Finance Law in Shocking Reversal

In a surprising legal turnaround, Kenya’s Supreme Court has reinstated the contentious 2023 Finance Act, overturning a prior High Court decision that had voided the law. The act, championed by President William Ruto’s administration, introduces a range of tax measures aimed at broadening Kenya’s revenue base but has sparked intense debate over its economic impact on citizens.

The High Court’s earlier ruling in July declared the Finance Act unconstitutional, citing concerns over due process in its passage and the potential burden on already struggling Kenyans. Among the most controversial provisions of the act is the Housing Fund Levy, mandating a 1.5% deduction from workers’ salaries to fund affordable housing. The levy faced backlash from both individual taxpayers and industry players, who argued it would cut into disposable income and lead to job losses in the private sector.

However, the Supreme Court found that the High Court had overstepped in voiding the law. In a 5-2 majority decision, the justices stated that while the concerns raised about public participation and transparency were valid, they did not render the entire act unconstitutional. Chief Justice Martha Koome emphasized the judiciary’s role in upholding legislative authority, pointing out that only egregious violations justify nullifying an entire law.

This ruling has reignited debate on Kenya’s taxation policies and the balance between fiscal responsibility and economic welfare. Supporters argue that the Finance Act is necessary to close Kenya’s budget deficit and reduce dependence on external borrowing. Treasury Cabinet Secretary Njuguna Ndung’u praised the court’s decision, calling it a victory for economic stability. “This law will allow us to implement critical reforms that are essential for Kenya’s financial health,” he noted.

Meanwhile, opposition leaders and civil society groups have decried the ruling as a blow to the average Kenyan. Former Prime Minister Raila Odinga, a vocal critic of the act, condemned the decision, vowing to continue fighting for what he described as “justice for the common mwananchi.”

As the Finance Act returns to force, all eyes will be on its implementation and the government’s efforts to address public concerns. The Supreme Court’s decision has not only restored the law but also underscored the ongoing tension between government policies and public sentiment.