Busia Senator Okiya Omtatah, on Friday, June 2, moved to the High Court, challenging the provisions of the Finance Bill 2023.
In his submission, Omtatah argued that the Bill was unconstitutional and thus asked the court to intervene.
Among the issues, Omtatah highlighted in his petition were the mandatory salary deductions to support President William Ruto's Affordable Housing agenda, which he argued violated the rights of Kenyans.
"Section 76 of the Bill threatens socio-economic rights (Article 43) to the extent that, if made law, the fund will require a 3 per cent reduction in basic salary for employees and a 3 per cent contribution from employers, thereby reducing worker’s purchasing power as it increases business operating costs," Omtatah told the court.
"Section 76 of the Bill threatens the freedom to own property (Article 40(1)) by proposing to compel civil servants to participate in a mandatory tax scheme disguised as a means to facilitate property acquisition," the Busia Senator added.
Omtatah pointed out that the Senate and the National Assembly should have debated the Bill before being tabled.
The Busia lawmaker also expressed worry that the National Assembly would pass the Bill without involving the Senate, allowing Ruto to ascend into law.
He thus sued Treasury Cabinet Secretary Njuguna Ndung'u and Attorney General Justin Muturi, who he argued were advisers to the government.
"The Treasury has been sued herein for having violated Articles 3(1) and 153(2)(a) of the Constitution by presenting to the National Assembly the Finance Bill 2023 parts of which threaten to violate express provisions of the Constitution of Kenya 2010 and the principles of natural justice, and to undermine Kenya’s economic organisation," the petition read in part.
Omtatah's petition came days after Ruto pleaded with him against challenging the Finance Bill 2023 in court. During a church service in Busia, on Sunday, May 28, Ruto argued that the Affordable Housing programme aimed to empower Kenyans.
He further insisted that the 3 per cent deduction was not a tax but a levy where workers could recoup their money after seven years.
According to the Head of State, the collected money would serve as a guarantee to investors partnering with the government to build affordable homes.
In his Madaraka Day Celebration speech on Thursday, June 1, Ruto expressed optimism that Kenyans had embraced the idea. He, however, vowed to address the questions raised by Kenyans regarding the affordable housing programme.
Besides imposing a 3 per cent mandatory salary deduction, the finance Bill proposes a 15 per cent withholding tax on content creators and increasing revenue on imported beauty products such as human hair, wigs, artificial nails and beards.
The Finance Bill 2023 also introduces a new sub-section to section 17 of the Value Added Tax (VAT) Act to allow the owner of taxable supplies compensated for the loss of the goods to pay 16 per cent VAT.
Matatu operators would also be affected as the Bill proposes monthly deductions per seat.