High Court Orders Suspension of New Taxes Imposed on Mobile Money, Kerosene

The High Court has suspended the implementation of new taxes recently announced by Treasury Cabinet Secretary Henry Rotich

The taxes were imposed under the Finance Bill 2018, affecting those who use mobile money and kerosene among other things. 

In a ruling read by Justice Wilfrida Okwany, the court issued a directive asserting that there would be no practical way of compensating Kenyan taxpayers who have already been affected by the implementation of the new tax regime. 

[caption caption="National Treasury Cabinet Secretary Henry Rotich reads the 2016/17 budget at Parliament Buildings in Nairobi on June 8"][/caption]

Justice Okwany ruled: "I am satisfied that from the material placed before me, the petitioner has made out a prima facie case with a likelihood of success and I find that it is necessary to grant conservatory orders to preserve the subject matter of the suit while awaiting final determination of the constitutionality of the Finance Bill 2018."

The judge ruled following an application filed by activist Okiya Omtatah challenging the implementation of the new tax measures. 

According to Omtatah, the implementation of the new tax measures was unlawful since the matter was only proposed by the Treasury CS during his budget presentation speech. 

Additionally, Justice Okwany had suspended the implementation of new "Robin Hood" tax on bank transfers, which imposes 0.05 percent excise duty on transactions worth Ksh500,000 and above.

Commercial Bank of Africa and Equity are among many financial institutions that have adjusted their rates in conformity.

While temporarily suspending the implementation of the charges, Okwany declared that if the case is heard and the court finds that the implementation of the bill is constitutional, there will be no prejudice to the respondents since the bill will be immediately implemented.

“If on the other hand, the court at the end finds that it is unconstitutional there will no practical way of compensating Kenyan taxpayers," Okwany continued.

[caption caption="Activist Okiya Omtatah outside Milimani Law Courts"][/caption]