Taxation Pain: Lawyer wants judges exempted from Ruto taxes

Law society of Kenya Council Member lawyer Kipkoech Bernhard Ng’etich left and his Counterpart Peter Okiro after filling a petition against  the Judicial Service Commission at a Nakuru Court  on January 22, 2019. [File, Standard]

A Nakuru-based lawyer has filed a petition at the High Court seeking to have judges exempted from paying increased taxes under the Finance Act 2023.

Peter Okiro, in a petition filed through his lawyer lawyer Kipkoech Ng’etich said the remuneration and benefits accorded to judges is one of the canons of independence of the Judiciary, thus judicial independence has everything to do with remuneration and benefits of the judges.

Okiro’s lawyer said the remuneration and benefits payable to a judge are Constitutionally ring-fenced and cannot be varied in any way whatsoever to the disadvantage of any particular judge.

This he said, aims at ensuring that judges render their services and mandate independently and impartially, free from undue influence or duress, albeit any uncertainties on what the future may hold.

The lawyer (Ng’etich) said Sections 26 and 84 of the Finance Act 2023 are unconstitutional to the extent that they seek to detrimentally alter the remuneration and benefits accorded to the judges.

“There is an apparent risk of the judicial officers being subjected to an unconstitutional law to their utter detriment contrary to the constitutionally enshrined principles of judicial independence,” read the petition in part.

Okiro has named the National Assembly, the Speaker of the National Assembly, the Treasury CS, the Attorney General, the Salaries and Remuneration Commission, and the Commissioner General Kenya Revenue Authority as respondents in the case.

The Judicial Service Commission has also named as an interested party.

The lawyer wants the matter referred to the Chief Justice to constitute a three-judge-bench to hear and determine the matter.

Okiro, in the petition, said Article 160(4) of the Constitution of Kenya provides that the remuneration and benefits payable to a judge shall not be varied to his disadvantage.

The Government in June enacted the Finance Act, 2023. President William Ruto assented to it on June 26 and came into operation on July 1 2023, resulting in the amendment of various provisions relating to taxes.

Among the provisions affected by the Act is The Third Schedule of the Income Tax Act, Cap 470, and Laws of Kenya which relates to rates of personal relief and tax. The Act saw an increase in the tax rate.

The lawyer said judges stand to be prejudiced by an increase in the tax rate provided in the Act as they fall within the increased brackets of taxation.

He noted that the Act, at Section 84, introduces the affordable housing levy which provides that an employee will pay 1.5 per cent of his gross income in respect of the tax.

The tax he noted further prejudices the income of the judges.

“There are other proposals, including proposals to increase the National Health Insurance Fund contributions to 2.75 per cent of income, which if effected will also increase the tax burden,” read the petition.

Okiro said increasing the tax burden on judges thus is not permissible under the Constitution.

“The reduction of the remuneration and salaries of judges are scurrilous attacks against the financial and operational independence of the judges and the Judiciary, which is a coup against the constitution,” he added.

The lawyer said there was a good reason why Kenyans enacted Article 160 (4) of the Constitution to ring-fence the remuneration and benefits of judges, and the government cannot pass laws which adversely affect their remuneration and benefits.

The Government, he said ought to have specifically provided for the exemption of judges in the increased taxation or alternatively increasing judges’ remuneration to ensure there is no violation of the Constitution.

The court, he said should not face trick and dishonesty being meted on the Kenyans by neutering of the judicial independence, adding that Kenyans and the Constitution will be the victims and not the judges.

The lawyer wants the court to issue a declaration that sections 26 and 84 of the Finance Act, 2023, are unconstitutional.

He also wants the court to declare government violated Article 160 (4) of the Constitution by passing the Finance Act, 2023, without making special provisions to protect the existing remuneration of judges, either by making an exemption or increasing their remuneration.

Further, Okiro wants the court order JSC to ignore Sections 26 and 84 of the Act in so far as they adversely affect the remuneration and benefits of judges and pay out of the Consolidated Fund, the remuneration and benefits to Judges as prevailed before the passing of the Finance Act, 2023,

They also want JSC ordered to reimburse judges any monies deducted the implementation of the Act.

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