The High Court has declined to lift an earlier order stopping Treasury Cabinet Secretary (CS) Prof Njuguna Ndung'u from implementing the Finance Act, 2023.
In an early win for Senator Okiya Omtatah, who filed the petition to stop implementation of the new law, it will now proceed to CJ Martha Koome to constitute a bench for hearing and determination of the case.
In a ruling delivered Monday afternoon, Justice Mugure Thande also agreed with the petitioners that the case raises substantial constitutional issues.
Justice Thande ruled that the CS did not convince the court as to why the order should be lifted and from the submissions of all parties that argued before her, the balance tilted in extending the freeze.
The CS, through Attorney-General Justin Muturi, had argued that the conservatory order has the effect of shutting down government operations of the government as many other budgetary steps stand suspended.
“Upon evaluation of the submissions, I have no difficulty finding that the petitioners have established a case with a probability of success,” the judge said adding that the public will suffer prejudice if the suspension is lifted and the petitioners are successful in the end.
Immediately after the ruling, Mr Muturi asked for a temporary suspension of the ruling for between 7 and 14 days, to enable him move to the Court of Appeal for a stay.
The judge at the same time allowed a prayer for the case to be certified as raising weighty constitutional issues and directed the file to be taken to the Chief Justice Martha Koome to appointment of a bench of judges, to determine the case.
The petitioners want the Finance Act is unconstitutional because there was no concurrence of both Speakers of National Assembly and Senate as to whether there matters touching on counties.
Further, the Bill contravened Section 39 of the PFM Act and Standing Order No. 224(c) of the National Assembly, which shows the order of presentation of the Finance Bill and budget.
According to Mr Omtatah, the Standing Order provides that the Treasury Cabinet Secretary shall first present the budget policy highlights and revenue raising measures for the national government and shall thereafter present the legislative proposals on the revenue raising measures to Parliament.
“The failure to follow the procedure which was made so for specific reasons vitiates the whole process of debating and passing the bill and renders the said Act unlawful,” he submitted.
On the Housing levy, the petitioners argue that the fourth schedule of the constitution limits the national government’s functions in relation to matters housing, to development of a housing policy and nothing more.
Prof Ndung’u, however, defended the Act stating that the impact of these tax amendments on the general populace will be mitigated by concurrent efforts to improve public services, increase public investment, and stimulate economic growth.
He said the National Treasury invited proposals from government departments and agencies, the private sector, non-governmental organisations and individuals on tax policy measures for consideration by the Agency in preparation of the Bill.
