The highest court in Kenya has suspended a lower court decision that invalidated the disputed finance bill passed last year to maintain stability in the government’s finances.
The top court in Kenya suspended the ruling made on July 31 by the Court of Appeal, which was another setback for President William Ruto’s administration, which is facing financial challenges.
The appeals court had previously declared the 2023 Finance Act illegal and expressed concerns about the government’s ability to generate tax revenue.
This decision came after Ruto’s move in June to cancel the controversial 2024 finance bill in response to widespread protests, some of which turned violent, against the contentious tax increases.
However, the Supreme Court on Tuesday issued a conservatory order “suspending and staying the declarations” in the July 31 decision to “maintain stability in the budget” before it makes a final determination.
New hearings for the 2023 Finance Act will be held on September 10 and 11.
The appeal court had previously ruled that the act was “fundamentally flawed and consequently unconstitutional” due to deficiencies in the parliamentary procedures used to pass it.
The legislation, signed into law by President William Ruto in June last year, aimed to raise over $2.1 billion to service Kenya’s $78 billion debt and included new taxes on essentials like fuel, food, and mobile money transfers alongside a controversial housing levy.
The act sparked significant unrest, with months of protests that led to looting and violent clashes with police, raising concerns about Kenya’s stability. The unrest was driven by the proposed tax hikes and the housing levy, which were seen as exacerbating the financial burden on ordinary Kenyans.
The current year’s finance bill, which sought to raise an additional $2.7 billion through further tax increases, provoked a similar wave of demonstrations, primarily led by young Gen-Z Kenyans.
In response to the crisis, which marked the most challenging period of his nearly two-year presidency, Ruto withdrew the 2024 finance legislation after violent protests led demonstrators to storm parliament and police used live ammunition.
The unrest resulted in dozens of deaths and accusations of excessive force by the police. Ruto also reshuffled his cabinet, bringing in four opposition members, including Finance Minister John Mbadi. Mbadi has announced plans to raise about $1.2 billion by reinstating some unpopular taxes from the scrapped 2024 bill.
