Denis Mwangi

In a landmark ruling, the Court of Appeal in Nairobi has declared the Finance Act, 2023, unconstitutional.

The decision was delivered on July 31, 2024, by a panel of three judges: Justices M'Inoti, Murgor, and Mativo.

The court's judgment, detailed in a 120-page document, concluded that the enactment process of the Finance Act, 2023, was fundamentally flawed and violated several constitutional provisions.

The court found that the Finance Act, 2023, contravened Articles 220(1)(a) and 221 of the Kenyan Constitution, as well as sections 37, 39A, and 40 of the Public Finance Management Act (PFMA), which outline the budget-making process.

The judges ruled that the failure to comply with these constitutional and statutory requirements rendered the entire Act unconstitutional and void from the outset.

Kenya's National Treasury building is pictured in Nairobi, Kenya, on June 14, 2018. (Photo by YASUYOSHI CHIBA/AFP via Getty Images)

One of the critical points of contention was the lack of adequate public participation in the legislative process.

The court emphasised that Parliament is obligated to provide reasons for adopting or rejecting proposals received from the public during the public participation process.

The ruling stated, "a declaration is hereby issued that the failure to comply with this constitutional dictate renders the entire Finance Act, 2023, unconstitutional."

Moreover, the court upheld the High Court's finding that specific sections of the Finance Act, 2023—particularly those amending the Kenya Roads Act, 1999—were unconstitutional, null, and void.

This decision affirms that both houses of Parliament must concur in such legislative actions, which was not observed in this case.

The case was brought before the court by multiple appellants, including Okiya Omtatah Okoiti and several civil society organisations.

The appellants argued that the Act had been passed without proper adherence to constitutional principles, particularly regarding public participation and legislative procedure.

This ruling places the various tax amendments introduced by the Finance Act, 2023, in a state of uncertainty.

These amendments, which were intended to adjust tax rates and introduce new levies, now hang in the balance as the legal validity of the Act itself has been nullified.

Further complicating the situation is the context in which this ruling was delivered.

President William Ruto in June announced the withdrawal of the Finance Bill 2024, which was supposed to introduce new fiscal measures.

As a result, the country reverted to the Finance Act, 2023.

However, with this Act now declared unconstitutional, there is a lack of clarity on the legal framework governing taxation and public finance in the interim.

The ruling raises questions about the government's next steps to address this legal and fiscal conundrum.

Blow for President Ruto has his administration's first Finance Act 2023 has been declared unconstitutional

President William Ruto during a meeting at State House, Nairobi

Blow for  Ruto as Court of Appeal declares Finance Act 2023 unconstitutional

President William Ruto has announced that he has dismissed all members of his Cabinet.

Speaking during a media briefing at State House Nairobi on July 11, President Ruto announced that only Prime Cabinet Secretary Musalia Mudavadi will remain in office.

Similarly, the office of Deputy President Rigathi Gachagua is unaffected by the drastic move.

The head of state explained that this was necessitated by the recent development in the country, whereby many Kenyans have expressed their displeasure with the government.

"Upon reflection, listening keenly to what the people of Kenya have said and after a holistic appraisal of the performance of my Cabinet and its achievements and challenges, I have, in line with the powers given to me by Article 152(1) and 152(5)(b) of the Constitution and Section 12 of the Office of the Attorney-General Act, decided to dismiss with immediate effect all the Cabinet Secretaries and the Attorney-General from the Cabinet of the Republic of Kenya except the Prime Cabinet Secretary and Cabinet Secretary for Foreign and Diaspora Affairs," he spoke.

President Ruto announced that he will immediately engage in extensive consultations across different sectors and political formations, with the aim of setting up a broad-based government.

The new team will assist the president in accelerating and expediting the necessary, urgent and irreversible, implementation of radical programmes to deal with the burden of debt, raising domestic resources, expanding job opportunities, eliminate wastage and unnecessary duplication of a multiplicity of government agencies.

Ruto added that running of the government will continue, with the ministries now being under principal secretaries.

He stated that in the coming days, he will unveil a new team.

The following are the Cabinet secretaries who have been dismissed.

<ol><li>Justin Muturi (Attorney General)</li><li>Kithure Kindiki (Interior and National Administration)</li><li>Rebecca Miano (Trade &amp; Investments)</li><li>Aden Duale (Defence)</li><li>Alfred Mutua (Tourism &amp; Wildlife)</li><li>Alice Wahome (Lands)</li><li>Njuguna Ndungu (Treasury)</li><li>Aisha Jumwa (Gender, Culture, The Arts and Heritage)</li><li>Davis Chirchir (Energy &amp; Petroleum)</li><li>Moses Kuria (Public Service, Performance and Delivery Management)</li><li>Kipchumba Murkomen (Roads, Transport and Public Works)</li><li>Soipan Tuya (Environment &amp; Forestry)</li><li>Peninah Malonza (EAC, ASALs &amp; Regional Development)</li><li>Zacharia Mwangi (Water, Sanitation and Irrigation)</li><li>Susan Nakhumicha (Health)</li><li>Mithika Linturi (Agricultute &amp; Livestock Development)</li><li>Eliud Owalo (ICT and the Digital Economy)</li><li>Ezekiel Machogu (Education)</li><li>Ababu Namwamba (Youth Affairs, Sport &amp; Creative Economy)</li><li>Simon Chelgui (Co-operatives &amp; Micro, Small and Medium Enterprises)</li><li>Salim Mvuyra (Mining, Blue Economy and Maritime Affairs)</li><li>Florence Bore (Labour and Social Protection)</li></ol>

<h3>Watch President Ruto's address below</h3>

President Ruto dissolves his Cabinet

President Ruto fires entire Cabinet except DP Gachagua & Prime CS Mudavadi

President William Ruto was questioned on Sunday about any regrets regarding the government's actions leading up to the protests against the Finance Bill 2024 that turned deadly.

During a media roundtable interview at State House, President Ruto admitted that the government should have communicated its agenda better.

“Do you regret anything at all? What should you have done better, what should your people have done better?” Joe Ageyo asked.

Still holding the view that the controversial bill was beneficial for the country, the head of state expressed that better <a data-link-role-code="open_new_tab" href="https://www.pulselive.co.ke/news/local/day-2-of-finance-bill-2024-protests-demos-expand-to-uasin-gishu-and-other-counties/t0fjn8e">communication around the Finance Bill 2024</a> could have prevented the deadly protests and the eventual withdrawal of the bill.

President William Ruto during a media roundtable on June 30, 2024

“Maybe there are things we should have done better. We should have communicated better. I think the biggest problem we have, even with the Finance Bill, is that the finance bill has great benefits for Kenya,” he said.

President Ruto explained that the <a data-link-role-code="open_new_tab" href="https://www.pulselive.co.ke/business/domestic/kenya-fulfils-6-of-imfs-strict-conditions-in-budget-and-finance-bill-2024/e3qf7z5">Finance Bill 2024 was imposing taxes on imported products</a> to help grow the local manufacturing and agriculture sectors.

“I promise you, if I am given a chance to explain to the people of Kenya what was in the Finance Bill and what the Finance Bill would have done for this country, every Kenyan would have agreed with me,” he stated.

“I am sure my communication team failed; our communication architecture did not deliver, did not get the message out to the people of Kenya,” he added.

He also said that Kenyans took to the streets to protest about other issues that were not in the Finance Bill 2024.

President Ruto, later during an interview with young journalists, invited the youth for a discussion to be held on X, where he will address their concerns.

READ: <a href="https://www.pulselive.co.ke/news/local/truth-about-reports-of-ruto-meeting-gen-z-leaders-at-state-house/r9z8ch4">Truth about reports of Ruto meeting 'Gen Z leaders' at State House</a>

“I have heard what you have said, I have seen what you have done, and you have made recommendations. Some I will outright implement on cutting down on government largesse and reducing the number of offices.

“I will deal with some of the issues that you have raised. You have given me some difficult choices. I will suggest to you how we can together address the difficult choices that you have put on the table,” he said.

The president said that he would be as clear as possible during the discussion and urged young Kenyans to work within the parameters of the law and be respectful in order to move forward as a country.

President William Ruto was questioned on Sunday about any regrets regarding the government's actions leading up to the protests against the Finance Bill 2024 that turned deadly.

Ruto: My biggest regret about Finance Bill 2024 protests

<ul><li>President William Ruto declines to ratify Finance Bill 2024 amidst public pressure and protests</li><li>Protests against the bill escalated to violent clashes with casualties and extensive property damage</li><li>The President is expected to address the nation soon to outline the government's next steps</li></ul>

In a surprising turn of events, President William Ruto has declined to ratify the highly controversial Finance Bill 2024.

The head of state also announced that the government has withdrawn the bill entirely and will have to make adjustments to the budget to reflect the decision.

He said that he came to the conclusion after countrywide discontentment with the bill as it is.

"Because we have gotten rid of the Finance Bill 2024, we must have a conversation on how to manage the affairs of the country and the debt situation together. I will propose an engagement with the young people and listen to our sons and daughters," he said.

He also called for further budget cuts in all sectors of the government to aid the country live within its means.

The law has been at the heart of the recent violent protests across Kenya.

President Ruto's decision comes amidst mounting pressure from the public and widespread opposition to the proposed tax hikes included in the bill.

The Finance Bill 2024 has faced significant backlash from Kenyans who argue that the new tax measures would exacerbate the already high cost of living.

"Having reflected on the continuing conversation around the content of the finance bill 2024 and listening keenly to the people of Kenya who have said loudly that they want nothing to do with this Finance Bill 2024. I concede and therefore I will not sign the 2024 Finance Bill and it shall subsequently be withdrawn," President Ruto stated.

&nbsp;Starting with the Executive Office of the President, and extending to the entire executive arm of government, the head of state directed that operational expenditure in the presidency be reduced.

The following will be reduced; allocations for the confidential vote, reduce travel budget, hospitality and purchase of motor vehicles, renovations and other expenditures.

The protests, which began as peaceful demonstrations, escalated into violent clashes with police forces, resulting in casualties and extensive property damage, including the storming of the Parliament building.

President Ruto’s decision to reject the bill marks a significant moment in the ongoing crisis.

The President is expected to address the nation shortly, where he will provide further details on his decision and outline the government's next steps.

The announcement of the President’s decision has been met with mixed reactions.

Many Kenyans have expressed relief and hope that this move will pave the way for more inclusive and responsive governance.

However, some remain skeptical about the government’s commitment to addressing the underlying issues that have fueled the unrest.

They also argue that it should not have taken the loss of lives and damage to property for the government to act on the wishes of many Kenyans.

In a statement released earlier today, the President’s office acknowledged the public's concerns and emphasized the administration's dedication to finding solutions that balance fiscal responsibility with the needs of the citizens.

President Ruto’s upcoming address is highly anticipated, with citizens and political analysts alike eager to hear how the administration plans to navigate this challenging period.

This address comes in the backdrop of his statement on Tuesday evening, condemning the invasion of Parliament during the protests, saying that the demos were hijacked by criminals.

He announced that he has directed all the organs of national Security to deploy measures to thwart any attempt by dangerous criminals to undermine the security and stability of the country.

“Accordingly I assure Kenyans that we shall provide a full effective and expeditious response to today's treasonous events,”&nbsp;President Ruto declared.

He said that It is not in order that criminals pretending to be peaceful protesters could reign terror against the people, their elected representatives and Parliament and expect to go Scott free.

Protestors opposing the Finance Bill 2024 in Nairobi

“I hear by put on notice the planners financiers orchestrators and abettors of violence and Anarchy that the security infrastructure is established to protect our republic and its sovereignty will be deployed to secure the country and restore normalcy,”&nbsp;the head of state said.

He thanked young people for helping the country organise democratic discourse around issues but added that the idea was taken up by criminals.

“I thank you and I assure you that the conversation you have begun around pertinent issues of our nation will continue to inform our policy and governance decision,”&nbsp;President Ruto spoke.

He committed to championing issue-based policy-oriented and tribeless engagement on critical national issues and providing a framework for this conversation to be processed and its outcomes implemented.

“However our national conversation on any subject matter must be conducted in a manner that respects and honours the fun foundational values upon which our nation is published namely constitutionalism the rule of law and respect for institutions,” the head of state stated.

He claimed that criminal elements within the protest were to blame for the losses incurred during the protests.

Several people were killed and property damaged in Nairobi and other areas after young people took to the streets to oppose the Finance Bill 2024.

President William Ruto speaks during a briefing at State House

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