High Court Judge Mugure Thande, on Friday, June 30, issued conservatory orders suspending the implementation of the Finance Act, 2023.
The judge ruled in response to a petition filed by Busia Senator Okiya Omtatah, which urged the court to suspend the tax hikes pending the hearing and determination of his application.
Omtatah's request to bar Ruto from enacting the Finance Act 2023 was also granted.
"I am satisfied that the Application meets the test for conservatory orders and I do grant prayers 2 and 3 of the Application until July, 5 when the matter is scheduled for mention for directions.
"Pending the hearing and determination of the application and/or the Petition, the Honourable Court be pleased to issue a conservatory order suspending the Finance Act, 2023," read part of the ruling.
The court, therefore, issued an interim order prohibiting the respondents and interested parties or their agents howsoever acting from giving effect to the Finance Act, 2023.
Justice Thande ordered the petitioner to serve all parties including Treasury CS Njuguna Ndung'u before end of the day, Friday, June 30, 2023.
She also ordered the respondents to file their responses by Tuesday, July 4, after which the High Court will list a hearing date.
The petition challenged the constitutionality of several provisions of the Finance Act, 2023, including the increase in the Value Added Tax (VAT) on petroleum products from 8 to 16 per cent, the 1.5 per cent Housing Levy, the introduction of a new tax on digital content creation, and the changes to the tax regime for mobile money operators.
Speaking to Kenyans.co.ke, the Busia Senator argued that the provisions of the Finance Act violated the right to equality, the right to property, and the right to a fair hearing. He also stated that the provisions were arbitrary and unreasonable.
“Forcing employees to contribute an amount of money based on the applicable blanket deductible percentage without consideration of their existing contractual obligations on their salaries is not reasonable,” Omtatah stated.
Omtatah stated that the suspension of the implementation of the Finance Act is a significant victory for those involved in activism.
He noted that it was also a victory for Kenyan taxpayers, who will now be spared the increase in VAT and the other changes to the tax regime.
Addressing the media immediately after the ruling, the Chairman of the Finance and National Planning Committee in the National Assembly, Kuria Kimani, assured that the conservatory orders will remain in place until the case is heard and determined.
Kuria who is also the MP for Molo noted that the suspension of the implementation of the Finance Act is a major setback for the government, and it is a sign that some people did not mean well for the government.
