Kenya's Top Court Suspends Ruling on Unconstitutionality of 2023 Finance Law

Kenya's Supreme Court on Tuesday suspended a lower court's ruling that declared the 2023 Finance Law unconstitutional, temporarily preserving the stability of the national budget until the merits of the government's appeal can be heard next month.

The finance law, which is presented to parliament annually, sets out the government's revenue-raising measures, including tax hikes that have become a contentious issue. The Court of Appeal's ruling against the 2023 Finance Law last month was a major blow to President William Ruto's administration, as it struck down a key financial instrument aimed at addressing Kenya's heavy public debt.

President Ruto, facing mounting pressure from both hard-pressed citizens and international lenders like the International Monetary Fund (IMF), has argued that tax increases are crucial to funding development programs and paying off national debt. However, the finance law has sparked widespread public backlash, particularly from opposition parties who led violent street protests last year in response to measures like the doubling of value-added tax on fuel and the introduction of a housing tax.

The Supreme Court justified its suspension of the lower court's ruling, stating: "We find that public interest tilts in favour of granting conservatory and stay orders to ... maintain stability in the budget and appropriation process pending the determination of this appeal."

The government's appeal will be heard by the Supreme Court on September 10 and 11, where the law's constitutionality will be reviewed. In the meantime, the government continues to rely on the 2023 law to collect taxes, having withdrawn this year's finance bill in June following youth-led protests, the most significant challenge of Ruto's presidency.

With the fate of the 2023 Finance Law still uncertain, the outcome of next month's hearings could have major implications for Kenya's fiscal policies and the political landscape leading into 2024.