The Supreme Court of Kenya on Tuesday reversed the Court of Appeal ruling that had declared the Finance Act 2023 unconstitutional. President William Ruto signed the Finance Act into law on June 26, 2023, but it was later contested for unconstitutionality before the High Court.
The 11 petitions filed in the High Court challenged the constitutionality of the Act based on its provisions, including the housing levy, and the legislative process employed to pass it. Some of the grounds relied on included inadequate public participation, dismissal of most input from the public, and introduction of new amendments that were not subjected to public participation. The High Court, in its decision, declared sections 76, 78, 84, 87, 88, and 89 of the Finance Act 2023 unconstitutional. A prohibition order was also issued to prevent the Act’s housing levy from being collected.
On appeal, the Court of Appeal affirmed that sections 76 and 78 were unconstitutional and void. It also held that section 21 introduced by the National Assembly after the public participation phase was unconstitutional for want of fresh public participation and violated the constitution. Finally, the court rendered the entire Act unconstitutional due to non-compliance. However, the Supreme Court issued an order staying the Court of Appeal’s decision.
The Supreme Court, deciding on the appeal from the Court of Appeal, maintained that Sections 76, 78, and 87 were unconstitutional as they “were neither incidental nor directly connected to the money bill”. The court further held that the parliament was not required to undertake fresh public participation where new and substantive amendments are effected according to public participation due to the time-sensitive nature of a finance bill. The court also ruled that “The National Assembly…met the threshold of a reasonable measure for considering proposals, views, and suggestions from the public concerning the public participation exercise conducted on the Finance Bill, 2023.”
The court’s ruling was met with disapproval from many, including Faith Odhiambo, president of the Law Society of Kenya, who wrote in her X (formerly Twitter) account saying,
We respectfully disagree with the approach taken by the court… Nevertheless, we welcome the Court’s recommendation for enactment of statute to guide public participation. We however hope that should the Court be invited to make future considerations on the subject of Public Participation, they will provide a more elaborate and purposive guidance on the modalities, scope and extent of Public Participation.
The court recommended that the parliament guarantees public participation in the law-making process as provided by Article 118 of the Kenyan constitution, ensures citizens have access to every phase of a bill’s creation and takes into consideration feedback received through public participation.