NAIROBI, Kenya, Jul 10 – The High Court is on Monday expected to rule on the suspension of the newly signed Finance Act that is set to double fuel tax and introduce new taxes.
Justice Mugure Thande extended interim orders halting the government from collecting taxes outlined in the Finance Act, 2023 until she delivers a substantive ruling.
Busia Senator Okiya Omtata who is behind the petition said the law is unconstitutional adding that its implementation would subject Kenyas to great suffering.
The High Court suspended the Finance Act 2023 on June 30, a day after it was scheduled to come into force amid uproar over tax proposals including the doubling of Value Added Tax (VAT) on fuel.
Justice Thande then directed the State to file a response by Tuesday, July 4.
The orders effectively stopped the government from levying any taxes under the new Act, including the 8 per cent VAT increment on fuel set to take effect Saturday.
The Energy and Petroleum Regulatory Authority (EPRA) however proceeded to effect an eight per cent increment in prices of petrol, diesel and kerosene, adjusting the VAT rate from 8 per cent to 16 per cent.
President William Ruto’s government pushed the law through parliament despite stiff opposition, saying extra revenue measures were needed to help deal with growing debt repayments, and fund job-creating initiatives.
Doubling the fuel tax to 16 percent and the introduction a 1.5 percent housing levy for all employees is among a raft of taxation measures contained in the Finance Act 2023.
