the Supreme Court has granted Kenyan President Ruto the authority to temporarily uphold the taxes introduced under the Finance Act 2023 until further court hearings. Last month, the Court of Appeal had ruled that the Act was “unconstitutional” due to irregularities in the parliamentary process.
The Supreme Court’s ruling issued on Tuesday, August 20, 2024, aims to maintain “the stability of the budget” by allowing the government to keep the taxes stipulated in the 2023 Finance Act in effect until the next hearings, scheduled for mid-September. This includes the increased VAT on fuel and higher tax rates on top incomes.
The Kenyan government argues that canceling these provisions would result in a loss of over €1 billion in tax revenue, which is crucial for funding development projects and managing the country’s significant debt, which stands at 70% of GDP. President William Ruto has insisted that tax increases are necessary to address these financial challenges.
The government plans to reintroduce several tax measures from the contentious 2024 budget proposal, including an ecological tax. However, sanitary towels, a key issue in previous protests, will be exempted.
The prospect of new taxes has sparked widespread criticism on social media, with some Kenyans threatening to return to the streets in protest.