(MENAFN) The Kenyan High Court has made a significant ruling by striking out key clauses of the Finance Act 2023, a contentious law that has been widely criticized for its role in substantially increasing taxes and elevating the cost of living in East Africa's largest economy. The decision by High Court judges David Majanja, Christine Meoli, and Lawrence Mugambi nullified portions of the law, including a mandatory housing levy, deeming them unconstitutional and unenforceable.
In their 160-page judgment, the judges expressed that the housing levy, particularly its imposition on formal employment income while excluding nonformal income earners, was discriminatory, irrational, arbitrary, and in violation of the constitution. The housing levy had been a focal point of President William Ruto's agenda, who aimed to construct 1 million homes by 2027 as part of an affordable housing program already in progress in certain regions of the country.
The court's decision is perceived as a significant setback for the government, as political analyst Herman Manyora pointed out, noting that the ruling dealt a substantial blow to an administration that had faced declining public support due to the implementation of unpopular legislation. The Finance Act 2023, enacted earlier this year, not only included the controversial housing levy but also doubled the value-added tax on petroleum products to 16% and increased taxes on personal income up to 40%. The court's intervention reflects a judicial response to the concerns raised by the public and various stakeholders regarding the economic impact and perceived inequities of the legislation, emphasizing the delicate balance between fiscal policy and constitutional principles.
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