Kenya's Supreme Court Suspends Ruling on Finance Act 2023, Allows 16% VAT on Fuel

Aug 22, 2024, 05:33 PM

Kenya's Supreme Court has suspended a lower court ruling that declared the Finance Act 2023 unconstitutional. This decision allows the government to continue implementing the Act, including the collection of a 16% VAT on fuel, until the merits of the government's appeal are heard next month. The Finance Act 2023 had previously been challenged for its constitutionality, leading to significant unrest and deadly nationwide protests. Treasury Cabinet Secretary John Mbadi has emphasized the importance of maintaining a strong tax system to achieve a tax-to-GDP ratio of 20% over the medium term. He also highlighted the need for reforms to enhance revenue collection without changing tax rates and mentioned the government's intention to possibly reintroduce some progressive measures from the Finance Bill 2024. The Supreme Court's decision aims to preserve budgetary stability amid ongoing financial challenges.