The recent turnaround in Kenya over the Finance Bill, 2023 has sparked heated reactions and raised major questions about the country’s economic future. Indeed, the Supreme Court has overturned the Court of Appeal’s decision that had struck down the Finance Bill, handing a victory to the administration of President William Ruto. This decision has serious implications for the Kenyan government, which had been counting on the Finance Bill, 2023 to sustain its tax collection efforts after this year’s Finance Bill was withdrawn due to massive protests.
The Supreme Court made it clear in its statement that it rejected the Court of Appeal’s finding that the entire Finance Bill, 2023, was unconstitutional, thereby strengthening the incumbent government’s hand.
The 2023 Finance Bill, which included increases in fuel taxes, a housing levy and top tax rates, sparked opposition-led protests and unrest that resulted in more than 60 deaths in June and July. In the face of this wave of protest, President Ruto withdrew the pending bill, delaying the disbursement of a loan from the International Monetary Fund (IMF). He believes that the tax increases are crucial to finance development and address Kenya’s debt.
The IMF’s Executive Board is scheduled to review the new tranche of financing next Wednesday, following Kenya’s compliance with the Fund’s requirements.
This decision by the Supreme Court will undoubtedly have a significant impact on the Kenyan economy and the country’s political climate. It raises questions about the stability and sustainability of the current government’s fiscal policies, as well as Kenya’s ability to meet its commitments to international financial institutions.
It is essential that the Kenyan authorities demonstrate transparency and accountability in the management of public finances, in order to ensure the trust of citizens and international partners. Fiscal and financial decisions must be carefully considered and evaluated to ensure economic growth and the well-being of the Kenyan population as a whole.
Ultimately, Kenya is at a critical juncture in its economic and political history, where courageous and visionary decisions are needed to ensure a prosperous and sustainable future for the country and its people.