High Court extends orders suspending Finance Act

Wednesday, July 5th, 2023 18:09 | By
President William Ruto signing Finance Bill into law.
President William Ruto signing Finance Bill into law. PHOTO/@StateHouseKenya/X

The government will wait longer before it implements the impugned Finance Act 2023.

This is after Milimani High Court Judge Mugure Thande extended the interim orders halting the government's move to introduce new taxes rules.

Justice Mugure Thande extended the interim orders suspending the implementation of the Act until she delivers a substantive ruling on the suspension of the tax law on July 10.

This is after she heard lengthy submissions running for seven hours from the parties involved in the legal dispute.

On hiking of fuel prices, Justice Thande did not summon EPRA Managing Director Daniel Kiptoo Bargoria but ordered together with the Attorney General, Cabinet Secretary Treasury Prof Njuguna Ndung'u, the Speakers of the two Moses Wetangula and Amoson Kingi put in their responses by close of business day Friday, July 7.

"The application for contempt of court was not coming for directions today and l direct the responses to be filed by close of business on July 7 and directions will be given thereafter on a date to be advised," the judge said

In the lengthy submission made in court yesterday by Busia Senator Okiya Omtatah, lawyers Otiende Amollo and Dan Maanzo urged the court to suspend the implementation of the impugned Finance Act until the case is heard and determined saying it will subject Kenyans to slavery and servitude.

Arguments on Finance Act

The Senator told Mugure that the Finance Act was approved by Members of Parliament without the concurrence of the senators this illegal

Omtatah attacked the entire Act terming it unconstitutional saying it only talks about expenditure without stating how it will raise revenue.

While urging the court to extend the interim orders, he said if the government is allowed to implement the new tax law it will continue dogging the taxpayer.

Omtatah added that the Parliament erred by raising fuel prices by 16 per cent without giving an estimation of how much money it intends to raise.

"You can not tax Kenyans without telling them how much money you intend to raise," Omtatah stated

He stated that the power to tax people is anchored on the law which requires full participation of the two houses.

On his part, lawyer Amollo said that the entire Act is procedurally unconstitutional.

The lawyer faulted the speaker of the National Assembly Moses Wetangula for allowing the introduction of 22 new clauses on the floor of the house without public participation.

"To bring in a quarter of the entire Act of 84 clauses through an addendum is essentially to bring in a new bill which members of the public did not participate in," Amollo argued.

He said the purpose of the Finance Act is for amending existing laws, for various taxes and collection of duties.

Amollo stated that the government draws that mandate of amending the tax laws from Article 203 of the Constitution.

He said under that article if the issues are related to money they do not go to the Senate.

But if it goes beyond taxes and touches on other matters which affect counties, Amollo said the bill has to go to the Senate for concurrence.

"The Finance Bill went beyond finances and should have been referred to the Senate for concurrence," Amollo stated.

Amollo said that the two house speakers could not, therefore, agree to breach the Constitution.

"The two speakers could not sit and collude to breach the Constitution by endorsing the Finance Bill without the concurrence of the Senate," Amollo said.

He added that there will be no loss if the Finance Act is suspended until the hearing and determination of its legality.

"There will be no loss suffered in stopping the implementation of the Act since tax collection is continuing under the 2022 Finance Act," the lawyer stated.

He urged the court not to allow it to be 'sold fear' by the other arms of the government while violating the Kenyans' right to taxation.

Amollo further told the court that as of now the Finance Act continues to run and that the order does not stop payment of bills and salaries as alleged by the state.

Lawyer Amollo submitted that the Finance Act is merely seeking Ksh211 billion in additional taxes and it does not suspend the collection of taxes for the Ksh3.6 trillion budget.

"The idea of scare-mongering this court by Githu should be ignored," Amollo urged the judge.

He has also claimed that Treasury and EPRA have disobeyed the court order and gone ahead to implement some laws in the said Finance Act.

The request to suspend the Finance Act was vehemently opposed by Attorney General Justin Muturi stated that the orders will bring a budgetary crisis to the country.

Githu who represented Attorney General Justin Muturi further said the order means that no shilling can be spent by the government including paying Omtatah to sit in the senate.

He argues that the orders suspending the Finance Act have compromised the entire budget.

The court heard that the orders issued on Friday last week have since crippled the government operations in terms of revenue collections and the state will not be able to withdraw funds from the consolidated funds.

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