Block on tax hikes lifted until final ruling – Kenya court

A Kenyan court on Friday lifted the suspension of contentious tax hikes that had triggered opposition protests, permitting the government to implement the increased levies until a final ruling is made.

Last month, President William Ruto signed into law a finance bill projected to generate over $2.1 billion for the government’s depleted finances. However, the taxes could add further strain to a population already grappling with high inflation.

After a senator filed a case challenging the constitutional legality of the legislation, the Nairobi High Court had suspended the implementation of the law.

“The order prohibiting the implementation of the Finance Act 2023… is hereby lifted pending the hearing and determination of the appeal,” a three-judge bench ruled.

The decision comes after months of anti-government protests led by opposition leader Raila Odinga, partly driven by a cost-of-living crisis. These demonstrations escalated into incidents of looting and deadly clashes with the police.

The unrest has raised concerns among Kenyans and the international community, prompting calls for the two sides to engage in dialogue and find a political solution.

The Finance Act introduces new taxes or raises existing ones on essential commodities like fuel, food, and mobile money transfers. Additionally, it includes a contentious levy on all taxpayers to support a housing scheme.

According to the government, the imposed taxes will aid in job creation and contribute to reducing public borrowing.

Despite earlier suspension orders, Kenya’s energy regulator proceeded to announce a pump price increase last month, following the doubling of VAT to 16 percent, as mandated by the law.

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