High Court suspends Finance Act judgement implementation

Justices David Majanja (centre), Christine Meoli (left) and Lawrence Mugambi when they delivered their judgement on Housing Levy on Tuesday, November 28, 2023. [Collins Kweyu, Standard]

After declaring the Housing Levy contained in the Finance Act 2023 unconstitutional the High Court has suspended the implementation of its judgement until January 10, 2023.

Justices David Majanja, Christine Meoli and Lawrence Mugambi said the move was to give the government time to file an appeal.

The levy, which was meant to fund the government's affordable housing agenda, was challenged by various petitioners who argued that it was unconstitutional, vague, discriminatory, and lacked public participation.

The court agreed with the petitioners and said that the levy violated the Constitution and that there was no law allowing the Kenya Revenue Authority (KRA) to collect it.

The court also said that the levy was unfair since it targeted only employed Kenyans and the government did not demonstrate why it excluded other categories of income earners.

The National Assembly passed the Finance Act 2023 on June 22, 2023, and it was later assented by President William Ruto on June 26.

The Act, which was supposed to come into force on July 1, was stopped by the High Court on June 30, after Justice Mugure Thande issued orders barring its implementation until the case was heard and determined.

The government appealed this decision and on July 29, it got a reprieve after the Court of Appeal lifted the orders. The case was heard on September 13.

The National Assembly asked the court to freeze the judgement for 45 days to allow it to appeal parts which were declared unconstitutional.

The court said that the suspension of the judgement until January 10, 2023, was to give the government time to appeal and to avoid any confusion or disruption in the collection of taxes.

"The suspension is to enable the appellants to file an appeal and to avoid any confusion or disruption in the collection of taxes and levies which may affect the economy and the public interest," the judges said.

The court also ordered the parties to bear their own costs of the suit.