Taxpayer's pain, win for Ruto as court unfreezes the Finance Act

Treasury CS Njuguna Ndung'u before the Senate Standing Committee on Finance and Budget, April 5, 2023. [Elvis Ogina, Standard]

Kenyans will now bear the pain of the high cost of living after the Court of Appeal in Nairobi temporarily lifted orders freezing the implementation of the controversial Finance Act, 2023.

The orders issued on Friday, July 28, 2023, by Justices Mohamed Warsame, Kathurima M’Inoti and Hellen Omondi in effect handed Kenyans to the Kenya Kwanza administration by allowing implementation of the punitive law for the next two months.

Twin appeals filed by Attorney General Justin Muturi and Treasury Cabinet Secretary Njuguna Ndung’u will be heard and determined within 60 days.

The three judges termed the Finance Act a unique law and they faulted High Court judge Mugure Thande for issuing a blanket freeze.

The bench headed by Justice Warsame said the High Court ought to have considered that the government can refund the money to taxpayers if the courts find that they had overpaid when making subsequent tax payments.

Although there is a separate case challenging the Appropriation Act, 2023, before the High Court, the three judges observed that the Act that allows the government to spend had not been questioned.

They also said that Justice Thande failed to consider the public interest in the case.

“In conclusion, we are persuaded that the applicants have satisfied the twin principles for the grant of the orders sought, and that, public interest tilts in favour of setting aside the conservatory orders by the trial judge,” the Court of Appeal ruled.

Busia Senator Okiya Omtatah at KICC in Nairobi on July 27, 2023. [Elvis Ogina, Standard]

In the appeal, Muturi, through former Attorney General Githu Muigai and lawyer Kiragu Kimani put up a spirited fight to have the orders freezing the Act to be lifted.

They faulted High Court Judge Mugure Thande for issuing the temporary orders.

They accused Busia Senator Okiya Omtatah and his team of illegally stealing a match, as they allegedly did not disclose to the court that they had initially been denied the orders they were seeking.

Muturi claimed that the orders had in effect crippled government operations.

On the other hand, Okiya urged the court to dismiss the application. According to him, it was impossible for the Court of Appeal to intervene as the orders of the High Court were on a temporary basis.

According to the Senator, there is no arguable case before the Court of Appeal as Justices David Majanja, Christine Meoli and Lawrence Mugambi are yet to hear the 12 cases filed to challenge the new law.

“As framed, the appeal or the intended appeal will require this court to determine matters that are alive in the High Court and frustrate the proceedings in the High Court. The applicants must allow the High Court to determine the petition on merit whichever way it will do so, and then if aggrieved, move to this court. They cannot use this court to determine the petition in the High Court,” argued Okiya.

The Senator asserted that the government will not lose anything as Parliament has not approved any revenues to be raised from Kenyans.

Before the High Court, Omtatah, Eliud Matindi, Peter Agoro,  Dr Paul Saoke, and Clement Onyango are among the persons challenging the implementation of the new law. There is a total of 13 cases have been filed in the High Court.

Attorney General Justin Muturi in Nairobi on May 10, 2023. [Boniface Okendo, Standard]

 A glance at the cases indicates that the major dispute is on the process of enacting the bill into law and the net effect of the proposals on Kenyans.

Senator Okiya’s case is aggrieved that the National Assembly never sought concurrence from the Senate while preparing the Bill.

He argues in his case that Senate Speaker Amason Kingi on June 15 protested to his National Assembly counterpart Moses Wetang’ula for failing to submit the Finance Bill to the upper house for consideration and debate.

According to Okiya, the now Finance law touches on county government and was a money bill, therefore, it required consensus from Senators before it was debated and passed by the lower house.

Okiya targets the entire document.

“The entire Finance Bill, 2023 collapsed, and so did the resultant Finance Act, 2023, for having not been subjected to the concurrence of the two Speakers of Parliament under Article 110(3) of the Constitution” he argued in his case filed alongside Eliud Matindi, Michael Kojo, Benson Otieno, Blair Angima, Victor Okuna and Florence Kanyua.

On the other hand, Agoro takes a different bout against the Bill.

His argument is that the law has in effect touched other laws that needed amendment by both houses. He has cited the housing tax and increase of fuel levy from eight to 16 per cent as some of the draconian measures introduced in the new law without public participation.

 Agoro asserts that the net effect is that a taxpayer will be left poorer than before.