The Court of Appeal at Nairobi in Kenya has issued a judgment in a significant appeals case on Kenya’s Finance Act.
The case centered on the constitutionality of the Finance Act, 2023, which was enacted amidst considerable public controversy and legal challenges.
Details
The Finance Bill, 2023, was published on 28th April 2023 and quickly moved through the legislative process, passing the National Assembly and receiving presidential assent by June 2023. The Act introduced various amendments to 12 existing laws, including significant changes to the Income Tax Act, the Value Added Tax Act, and the Employment Act, among others.
One of the most contentious provisions was the introduction of the Affordable Housing Levy.
Legal Challenges
The enactment of the Finance Act, 2023, led to the filing of 11 constitutional petitions in the High Court, which were later consolidated. The petitions challenged both the legislative process and specific provisions of the Act.
The High Court declared several sections of the Act unconstitutional.
Court of Appeal Judgment
The appellants sought to overturn the High Court’s decision on multiple grounds. They argued that the Finance Act, 2023, was constitutionally enacted and that the High Court erred in its judgment.
The Court of Appeal’s judgment addressed the following key issues:
- Classification as a Money Bill: The Court upheld that the Finance Act, 2023, is fundamentally a money Bill. However, it contained provisions extraneous to a money Bill, specifically amendments to the Kenya Roads Board Act and the Unclaimed Financial Assets Act, which were deemed unconstitutional.
- Public Participation: The Court recognized that the National Assembly conducted sufficient public participation. However, it suggested that Parliament should provide reasons for adopting or rejecting public proposals to enhance transparency and accountability.
- Housing Levy: The introduction of the Housing Levy was found to lack a comprehensive legal framework, making it unconstitutional. The levy was also criticized for being discriminatory and arbitrary.
- Legislative Process and Concurrence: The Court found no requirement for joint concurrence between the Speakers of the National Assembly and the Senate for the introduction of money Bills, thus supporting the appellants’ position.
What Happens Now
The Court of Appeal’s decision reaffirms the importance of adhering to constitutional mandates in the legislative process.
While the Finance Act, 2023, remains largely intact, the ruling necessitates careful reconsideration of specific provisions that overstepped constitutional boundaries. The judgment also underscores the necessity for legislative bodies to ensure inclusivity and transparency in public participation processes.
This ruling sets a critical precedent for future legislation, emphasizing the balance between efficient governance and adherence to constitutional principles.
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