Kenya’s Supreme Court reinstated the 2023 finance law on Tuesday, overturning an appeals court decision that had previously invalidated the legislation. The ruling is a significant win for President William Ruto, who faced mounting opposition to the law’s controversial tax measures.
The 2023 finance law, which introduced tax hikes on fuel, a housing levy, and increased income tax rates for high earners, has sparked widespread protests and unrest. Opposition-led demonstrations earlier this year left over 60 people dead as Kenyans protested the economic strain caused by the new taxes. In response, Ruto withdrew this year’s finance bill, delaying access to funding from the International Monetary Fund (IMF).
The Supreme Court’s ruling paves the way for the government to continue tax collection under the finance law. “We hereby set aside the Court of Appeal’s finding declaring the entire Finance Act 2023 unconstitutional,” the court stated in its decision. Ruto argues that the tax increases are essential for financing Kenya’s development and addressing the nation’s rising debt.
The IMF, which had postponed disbursement pending the law’s implementation, is scheduled to review the next tranche of funding on Wednesday, following Kenya’s recent compliance with its requirements. The Supreme Court’s decision is likely to be viewed favorably by the IMF as Kenya seeks to stabilize its economy amidst fiscal challenges.