The State claimed an initial victory in the Finance Act 2023 case on Tuesday after the Supreme Court suspended the Court of Appeal’s ruling that declared the Finance Act illegal. This move offers a temporary reprieve to the government as it awaits the final determination of the appeal.
In a ruling delivered by the seven-judge bench, led by Chief Justice Martha Koome, the Supreme Court acknowledged the weight of public interest in its decision to issue conservatory and stay orders. The court emphasized that halting the annulment of the Finance Act was necessary to protect the core of the consolidated appeal and to maintain fiscal stability in the country’s budget and appropriation process until the appeal is decided.
“A conservatory order is hereby issued suspending and staying the declarations in Orders iii, iv, vi, vii & ix(i) issued in the Court of Appeal judgment dated 31st July 2024, in Civil Appeals Nos. E003, E016, E021, E049, E064 & E080 of 2024 (Consolidated) pending the hearing and determination of the consolidated appeal before this Court,” the Supreme Court order stated.
This decision follows an urgent appeal by the State, filed through the Treasury, which sought to overturn the Court of Appeal’s judgment. Treasury officials argued that nullifying the Finance Act 2023 would result in a revenue shortfall of approximately Ksh 214 billion, an amount that would be irretrievable unless a stay was granted promptly.
Treasury further contended that the rejection of the Finance Bill 2024 in Parliament added to the urgency, as a similar bill could not be reintroduced in the National Assembly for six months following its rejection.
“The impugned judgment poses an immediate, real, and immense challenge to the country’s monetary and fiscal policy. It jeopardizes the legislative framework supporting various economic sectors, whose subsidiary legislation is set to expire, and threatens the economic stability of the country,” Treasury’s court filings emphasized.
The suspension of the Court of Appeal’s ruling provides the government with critical breathing room to manage its fiscal policies and safeguard the economy while the Supreme Court deliberates on the broader implications of the case.
