The Court of Appeal in Nairobi in Kenya has issued a decision in a major appeals case relating to the Finance Act of Kenya.
The case focused on the constitutionality of the Finance Act, 2023, which was enacted amid considerable public controversy and legal challenges.
Details
The Finance Bill, 2023 was gazetted on 28 April 2023 and moved swiftly through the legislative process, passing through the National Assembly and receiving presidential assent by June 2023. The Act introduced various amendments to 12 existing laws, including major changes to the Income Tax Act , the Value Added Tax Act and the Employment Act, among others.
One of the most controversial provisions was the introduction of the Affordable Housing Levy.
Legal Challenges
The passage of the Finance Act, 2023 led to the filing of 11 constitutional petitions in the Supreme Court, which were later consolidated. The petitions challenged both the legislative process and specific provisions of the law.
The Supreme Court ruled various sections of the law unconstitutional.
Decision of the Court of Appeal
The appellants sought to overturn the decision of the High Court on several grounds. They argued that the Finance Act 2023 was constitutionally enacted and that the Supreme Court erred in its ruling.
The Court of Appeal’s decision addressed the following key issues:
- Classified as a money bill: The Court confirmed that the Finance Act 2023 is essentially a money bill. However, it contained provisions foreign to a money bill, namely amendments to the Kenya Roads Board Act and the Unclaimed Financial Assets Act, which were ruled unconstitutional.
- Audience participation: The Court recognized that the National Assembly had sufficient public participation. However, it suggested that Parliament provide reasons for approving or rejecting public proposals to enhance transparency and accountability.
- Housing contribution: The introduction of the housing levy was found to lack a comprehensive legal framework, making it unconstitutional. The levy was also criticized as discriminatory and arbitrary.
- Legislative Process and Agreement: The Court found no requirement for joint concurrence of the Speakers of the National Assembly and the Senate for the introduction of money bills, thus supporting the position of the appellants.
what is happening now
The Court of Appeal’s decision reaffirms the importance of following constitutional mandates in the legislative process.
While the Finance Act, 2023, remains largely intact, the decision calls for a careful review of specific provisions that cross constitutional boundaries. The decision also highlights the need for legislative bodies to ensure participation and transparency in public participation processes.
This decision sets a critical precedent for future legislation, emphasizing the balance between effective governance and adherence to constitutional principles.
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