On 26 June 2023, the President signed the Finance Bill, 2023 into law. On 30 June 2023, the High Court of Kenya issued conservatory orders suspending the Finance Act, 2023 (the Act) and prohibiting its implementation pending hearing and determination of an application filed together with a petition challenging the constitutionality of the Act. On 10 July 2023, the High Court delivered its ruling, allowing the application while suspending the implementation of the Act and directing that the petition proceeds for hearing and determination. By a ruling delivered on 28 July 2023, the Court of Appeal lifted the orders made by the High Court on 10 July 2023 pending hearing and determination of the appeal against the ruling of the High Court. The appeal is to be determined within 60 days from 28 July 2023.
The immediate implication of the ruling by the Court of Appeal is that the provisions of the Finance Act, 2023 are implementable. More specifically, the provisions that had an effective date of 1 July 2023 are now applicable and in force. This raises pertinent legal questions as to whether taxpayers will be liable for any back taxes, penalties and interest for the period during which the Finance Act, 2023 was suspended by the order of the High Court. Taxpayers need to scrutinise their tax affairs for the period 1 July 2023 to date in order to avert any adverse tax consequences on account of the provisions of the Finance Act, 2023.
In our Tax Alert of 12 July 2023, we highlighted the salient changes brought by the Finance Act 2023. Please see below the effective dates of the salient changes highlighted in our Tax Alert of 12 July 2023.
Click here to read the full alert.
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