Court of Appeal Declares Sections of Finance Act 2023 Unconstitutional
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The Court of Appeal has declared key sections of the Finance Act, 2023 unconstitutional, addressing major concerns about the legislative process and public participation. This landmark judgment has profound implications for legislative practices in Kenya, emphasizing the necessity for constitutional compliance.
Faith Odhiambo, President of the Law Society of Kenya, commented on the decision, stating, “The Court of Appeal’s decision on the constitutionality of the Finance Act, 2023, affirms the critical issues raised over the legislative process leading to its enactment.” She outlined the key points addressed by the court, which had initially been raised by the Petitioners at the High Court.
Firstly, the court opted not to address the Affordable Housing Levy issue, as it had been resolved through the enactment of the Affordable Housing Act, 2024. However, the court held that sections 76, 78, and 87 of the Finance Act, which amended non-financial provisions of the Kenya Roads Act and Unclaimed Financial Assets Act, did not belong in a money Bill and were therefore unconstitutional.
Secondly, the court emphasized the importance of adequate public participation in the legislative process. Odhiambo noted, “The 18 amendments made to the Finance Act after public participation were found to be in violation of the principle of participation of the people. As a result, the court determined that Parliament’s failure to explain its decisions rendered the public participation process fatally ineffective and the legislative process flawed.”
Additionally, the court scrutinized the Appropriations Act, 2023, finding it unconstitutional for exempting required revenue estimates, thereby violating principles of public finance in the Constitution and the Public Finance Management Act.
Odhiambo highlighted the broader implications of the ruling, stating, “The judgment emphasizes the importance of fair, legal tax legislation in the public interest. This decision builds on the existing precedence on the importance of constitutional compliance in the legislative process and the necessity of adhering to constitutional requirements, including public participation.”
The ruling serves as a reminder of the critical need for transparency and public involvement in the legislative process, ensuring that laws enacted are in the best interest of all Kenyans.
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