The Court of Appeal’s recent declaration of the Finance Act 2023 as unconstitutional has sparked widespread jubilation among Kenyan citizens, long burdened by rising taxes.....CLICK HERE TO READ THE FULL ARTICLE>>>
This judicial victory is seen as a rare win against government overreach, but it has set the stage for significant challenges ahead.
The ruling has left a Ksh510 billion void in the national budget for the current fiscal year. President William Ruto’s administration faces the daunting task of addressing this budget shortfall.
The National Treasury responded to the setback by filing a notice of appeal with the Supreme Court, arguing that overturning the Finance Act 2023 would slash Ksh 164 billion from anticipated revenue, further straining an already fragile fiscal framework.
The Finance Act 2023 had introduced several tax hikes, including a rise in VAT on fuel from 8% to 16% and new income tax bands for high earners. With the Act now invalidated, the government must revert to previous tax laws, complicating revenue collection and fiscal planning.
The Treasury’s appeal underscores concerns over potential budget cuts, increased borrowing, and a possible constitutional crisis.
The reintroduction of higher taxes on essentials and the scrapping of the Finance Bill 2024, which aimed to reverse some cuts, further complicate the situation.
The National Assembly’s Majority Leader, Kimani Ichung’wah, hinted at upcoming budget reductions as the government adjusts to its reduced revenue capacity...CONTINUE READING>>
