Kenya's Court of Appeal has ruled the government's 2023 finance law unconstitutional, delivering a significant setback to President William Ruto's administration. The law, which included increased VAT on fuel, a new housing tax, and higher personal income tax rates, faced severe opposition and protests. The court's decision invalidates the entire Finance Act of 2023, following an earlier High Court ruling that had only partially struck down the law. The government, which had relied on this law for tax collection, now faces further legal challenges and uncertainty.
This ruling could have major implications for both employers and employees. Employers may experience disruption in financial planning and compliance due to the ongoing legal uncertainty around tax laws. For employees, there might be relief if tax increases are halted or revised, potentially affecting their disposable income.
Overall, the decision highlights the challenges faced by the government in balancing fiscal policies with public and legal pressures. It underscores the need for careful policy formulation to maintain economic stability and government credibility while addressing public concerns and legal requirements.
Aug 1st, 2024