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COURT: Law that allows Treasury to effect taxes without MPs approval illegal

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Summary

  • Provisional Collection of Taxes and Duties Act of 2018 allows Treasury to collect taxes pending approval of the Finance Bill 2018.
  • The law allows Treasury to collect taxes under the provisional arrangements for up to six moths.

The High Court has ruled that an alternative law that allows Treasury Secretary to effect new tax laws pending Parliament's approval is illegal.

The law allows Treasury to collect taxes pending approval of the Finance Bill 2018.

Justice Wilfrida Okwany declared the Provisional Collection of Taxes and Duties Act of 2018 as unconstitutional and invalid. The judge said that there is a danger in implementing a bill that has not been subjected to public participation.

The permits Treasury to collect tax billions it would have missed, as it waits for the legislative process, under the provisional arrangements for up to six moths.

Mr Rotich had in June published a legal notice indicating that he intends to use the Act to bring into force parts of the Finance Bill 2018 that relate to taxes and duties awaiting MPs approval.

This would allow Treasury to effect a raft of new taxes contained in the Finance Bill 2018 which is yet to receive parliamentarian's not.

It emerged on Tuesday that President Kenyatta's memorandum to Parliament rejecting MPs’ position on petroleum tax came with new taxes that would see the cost of of living go up.

The High Court ruling implies that the new taxes contained in the memorandum to National Assembly were unlawfully effected. The new levies were imposed on kerosene, bottled water, mobile money transfer, imported vehicles and Robin hood tax

Activist Okiya Omtatah had sued National Treasury Cabinet Secretary Henry Rotich, the Commissioner General of the Kenya Revenue Authority, the National Assembly and the Attorney General.

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