The Law Society of Kenya (LSK) has moved to court to challenge the implementation of the Finance Act and stop the government from collecting new taxes.
LSK has filed the case as urgent and wants the Constitutional and Human Rights Court to declare the new taxes unconstitutional.
In the application, LSK argues that this is not the time to increase taxes as the economy has pushed more Kenyans to a tight corner.
The lawyer's association has also stated that the new taxes will hit Kenyan employers hard amid rising unemployment.
"THAT pending the hearing and determination of this Application inter partes, a Conservatory Order be and is hereby issued restraining the 2nd Respondent whether acting jointly or severally by themselves, their servants, agents, representatives or howsoever otherwise from the implementation, further implementation, administration, application and/or enforcement of Section 10 (2) (3) of the Income Tax Act as amended by Section 7 of the Finance Act, 2023," reads part of the affidavit.
Appeals Court on July 28 lifted the orders stopping the implementation of the Finance Act, allowing the government to proceed with its implementation pending the determination of the case that was filed by Busia Senator Okiya Omtatah.
The Finance Act has faced opposition due to a raft of new taxes that will slash employees' payslips, coming months after the government increased statutory deductions like NHIF and NSSF.
Among the new deductions include a 1.5 per cent Housing Levy deduction that will go towards the funding of President William Ruto's ambitious affordable housing programme.
"THAT pending the hearing and determination of this Petition inter partes, a Conservatory Order be and is hereby issued restraining the Respondents whether acting jointly or severally by themselves, their servants, agents, representatives or howsoever otherwise from the implementation, further implementation, administration, application and/or enforcement of Sections 31B and 31C of the Employment Act as introduced by Section 84 of the Finance Act,2023 by collecting and/or demanding payment of the housing levy," LSK stated in their application.
Ruto has maintained that the Act was the only way out of the debt hole as it will give the government the much-needed revenue to fund its ambitious development agenda and create more jobs.
Groups including the opposition have argued that there are better ways to fund the Ksh3.6 trillion budget. The opposition among other things has asked Ruto to consider restructuring some debt instead of hiking the taxes.
Ruto has ruled out a debt restructuring and instead hiked taxes including collecting more from the top earners and increasing excise duty on imported furniture, airtime, and money transfer.
