The Court of Appeal has upheld a previous ruling by the High Court that major sections of the Finance Act 2023, which is still in operation after the rejection of its would-be successor Finance Bill 2024, are “fundamentally flawed” and “consequently unconstitutional.”
While the court agreed with parts of the appeal that several sections of the Finance Act were introduced post-public participation and were enacted in a way that bypassed crucial legislative stages.Some of the sections amended laws on income tax, VAT, Excise duty, the KRA Act, Special Economic Zones (SEZs) Act, and Export Processing Zones (EPZs) Act.The court declined to order the refund of taxes paid due to the Act, arguing that it had not been pleaded in the law court, and the law naturally assumes that legislative enactments are constitutional unless they are found not to be so.The appeal was filed by the National Assembly and Speaker Moses Wetangula, after the lower court ruled in favour of the 56 respondents who include companies, civil society groups, professional groups, trade unions, and individuals, among them Busia Senator and prolific public interest litigator Okiya Omtatah.
The High Court had found some sections of the act constitutional and others constitutional, prompting 7 appeals and 3 cross-appeals.
“Having found that the process leading to the enactment of the Finance Act, 2023, was fundamentally flawed and in violation of the constitution, sections 30 to 38, 52-63, and 23 to 59 of the Finance Act 2023 stand equally vitiated and therefore unconstitutional,” the three judge bench said in their judgement.
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