The High Court has temporarily suspended the implementation of the Finance Act 2023 which was to take effect from July 01, 2023.
The controversial Finance Act, which was signed into law by President William Ruto in June 26, 2023, would have seen the cost of living going up following the doubling of Value Added Tax on petroleum products.
While suspending the Finance Act, Justice Mugure Thande said the matter will be mentioned on July 5, 2023.
While speaking to NTV a few minutes after the court suspended the Finance Act, Busia Senator Okiyo Omtatah, who filed a petition to challenge the Finance Bill 2023, said the Bill had several issues that needed to be addressed before being passed.
“First the appropriation process was fast. There were also several amendments leaked into the Bill before being signed by the President. I wanted the court to make a determination on the merit of the Act,” Omtatah said in a phone interview with NTV.
Among the most important proposals approved was a 16 per cent VAT on gasoline, up from 8 per cent.
The contentious Housing Levy, which had initially been proposed to be at 3 per cent was also passed after it was amended to 1.5 per cent of gross pay. It had been converted into a tax.
The initial proposal called for the levy to be a savings account that Kenyans could access after seven years.
Digital creators will be subjected to a 5 per cent tax. This figure was originally proposed to be 15 per cent. Betting and insurance withholding taxes will be charged at 12.5 per cent and 16 per cent, respectively.
While filling the petition, Omtatah alongside four activists, cited 13 provisions in the Finance Bill 2023 as unconstitutional and will impose a huge burden on Kenyans who are struggling with the high cost of living.
“Parts of the proposed Finance Bill 2023 as drawn by the Cabinet Secretary for National Treasury and Planning pose threats to the nation and we are asking the court to quash them before the public are forced to face the consequences,” Omtatah said.
On May 28, 2023, President William Ruto pleaded with Omtatah not to challenge the proposed housing levy contribution under the Finance Bill, 2023 in court.
