Following demonstrations that caused President William Ruto to rescind this year’s finance bill, the Supreme Court of Kenya has overturned an appeal court’s ruling declaring the 2023 financial law null and void.
The government primarily uses the finance bills to outline revenue-raising initiatives, and with the repeal of this year’s legislation, Ruto’s administration has been depending on the 2023 finance law to keep collecting taxes.
“We hereby set aside the Court of Appeal’s finding declaring the entire Finance Act 2023 unconstitutional,” the Supreme Court said in its ruling.
Following a spate of protests organised by the opposition last year, the 2023 law was challenged in court after Ruto’s government used it to hike the top personal income tax rate, implement a housing charge, and triple the value-added tax on fuel, among other measures.
After taking power in September 2022, Ruto’s administration attempted to enact a fresh round of tax increases this year, which infuriated many citizens and led to violent riots in June and July that claimed over 60 lives.
Shortly after the national legislature ratified this year’s version of the finance law, Ruto was obliged to withdraw it due to the disturbance, which also caused a delay in the approval of a fresh funding tranche from the International Monetary Fund.
Ruto has maintained that the tax hikes are required to pay off a significant amount of public debt and support development initiatives in Kenya, the largest economy in East Africa.
After Kenya met the goals established by the Fund in a review of its loan program, the executive board of the IMF is scheduled to convene on Wednesday to approve the new payout. The 2023 finance law was ruled unconstitutional by Kenya’s Court of Appeal in July, but the top court stayed the decision until it considered a government appeal.