The High Court has suspended the implementation of new taxes imposed under the Finance Bill 2018, including those on mobile money and kerosene.
Justice Wilfrida Okwany issued the directive saying there will be no practical way of compensating Kenyan taxpayers who would have already been affected by the implementation of the new taxes.
"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," ruled Justice Okwany.
The judge issued the directive in a case in which activist Okiya Omtatah challenged the implementation of the new tax measures under the Finance Bill.
Mr Omtatah had argued that the implementation of the measures is unlawful since the matter was only proposed by National Treasury Cabinet Secretary Henry Rotich during his budget presentation speech.
The activist claimed the tax proposals must be discussed in Parliament and then assented by the President before implementation comes into force.
Justice Okwany at the same time suspended the implementation of new "Robin Hood" tax on bank transfers, which imposes 0.05 per cent excise duty on transactions worth Sh500,000 and above.
She pointed out that the Kenya Bankers Association, who had challenged the matter, raised the issue of ambiguity in the law, hence requiring the attention of the Attorney-General and the Kenya Revenue Authority to clarify.
The judge said that as it is, the law has been left subject to the interpretation of those who are supposed to implement it.