The Law Society of Kenya (LSK) has gone to court to dispute the Finance Act’s implementation and prevent the government from collecting new taxes. LSK has filed an urgent petition with the Constitutional and Human Rights Court, requesting that the additional taxes be declared unlawful.
LSK contends in the application that now is not the time to raise taxes because the economy has driven more Kenyans into a corner.The lawyer’s association has also indicated that the additional levies will be particularly difficult for Kenyan companies in light of rising unemployment.
“THAT waiting the hearing and ruling of this Application inter partes, a Conservatory Order be and is hereby issued restricting the 2nd Respondent from the implementation, further implementation, administration, application, and/or enforcement of Section 10 (2) (3) of the Income Tax Act as amended by Section 7 of the Finance Act, 2023,” reads part of the order.On July 28, the Appeals Court lifted the orders preventing the Finance Act from being implemented, enabling the government to proceed with its implementation until the outcome of the challenge filed by Busia Senator Okiya Omtatah.
The Finance Act has been met with hostility since it includes a slew of additional levies that would reduce employees’ pay slips, just months after the government increased mandatory deductions such as NHIF and NSSF. Among the new deductions is a 1.5% Housing Levy deduction, which will help support President William Ruto’s ambitious affordable housing initiative.
“THAT, awaiting the hearing and ruling of this Petition inter partes, a Conservatory Order be and is hereby issued restraining the Respondents, whether acting jointly or multiple times by themselves, their servants, agents, representatives, or otherwise, from implementing, further implementing, administering, applying, and/or enforcing Sections 31B and 31C of the Employment Act as introduced by Section 84 of the Finance Act,2023 by collecting and/or enforcing Ruto has insisted that the Act is the only way to get the country out of debt since it will provide the government with much-needed money to fulfill its ambitious development plan and create more jobs.
The opposition and other groups have claimed that there are better methods to support the Ksh3.6 trillion budget. Among other things, the opposition has requested Ruto to reconsider restructuring some debt rather than raising taxes. Ruto has ruled out debt restructuring in favor of raising taxes, including hiking excise duties on imported furniture, airtime, and money transfers.
