Court extends freeze order on Finance Act

Milimani Law Courts

The Milimani Law Courts in Nairobi. FILE PHOTO | NMG

The High Court has extended orders barring Treasury Cabinet Secretary Njuguna Ndung’u from implementing the Finance Act, 2023 after dismissing an application by the government to lift the freeze.

Justice Mugure Thande ruled on Monday that the CS did not convince the court as to why the order should be suspended and from the submissions of all parties that argued before her, the balance tilted in favour of the petitioners.

The CS through Attorney General Justin Muturi had argued that the conservatory order threatens to bring the operations of the government to a halt as many other budgetary steps stand suspended.

“Upon evaluation of the submissions, I have no difficulty finding that the petitioners have established a case with a probability of success,” the judge said adding that the public would suffer prejudice if the suspension is lifted and the petitioners are successful in the end.

The suspension of continues to extend the confusion on the fate of the taxes unlawfully collected by the government since July 1 after the initial suspension.

The petitioners are Busia Senator Okiya Omtatah, Eliud Matindi, Michael Otieno and four others.

“It is 12 days since the Act was suspended and the government has not shut down. There are mechanisms for continuity of the Finance Act, 2022. Income tax is being paid, people are paying import duty, except the new taxes and levies,” Senior counsel Otiende Amollo for Mr Otieno.

Temporary suspension

Immediately after the ruling Monday, Mr Muturi asked for a temporary suspension of the ruling for between seven and 14 days, to enable him move to the Court of Appeal for a stay.

But the judge rejected the plea.

At the same time, Justice Thande allowed a prayer for the case to be certified as raising weighty constitutional issues and referred the file to Chief Justice Martha Koome to constitute a bench to hear and determine the case.

The petitioners want the Finance Act declared unconstitutional, arguing that there is no concurrence of both Speakers of National Assembly and Senate on matters relating to counties.

Further, they argue that the tabling of the Finance Bill, now an Act after President William Ruto assented to it, was done without following due procedure.

On the housing levy, which compels the employer and employee to pay 1.5 percent each, the petitioners argue that the Constitution limits the national government’s functions on matters housing, to development of a housing policy and nothing more.

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