On Monday 26 June 2023, the President of Kenya signed the Finance Bill, 2023 into law. On Friday 30 June 2023, the High Court of Kenya issued conservatory orders suspending the implementation of the Finance Act, 2023 (the Act) pending the hearing and determination of the applications which were filed together with the petitions challenging the constitutionality of the Act.

On 10 July 2023, the High Court declined to set aside the conservatory orders it issued on 30 June 2023. The conservatory orders will now be in effect until the High Court determines the petitions. The petitions have been forwarded to the Chief Justice to constitute a bench to hear them. The respondents in the petitions may move to the Court of Appeal to have the conservatory orders lifted before the petitions are determined. We will update you on the developments.

Whilst the conservatory orders are in effect, the provisions of the Act have no legal effect. In Stanbic Bank Limited v. Commissioner of Domestic Taxes Tax Appeal No. E156 of 2020 (consolidated with Commissioner of Domestic Taxes v. Stanbic Bank Limited Tax Appeal No. E018 of 2021), the High Court held that a tax cannot be levied if its collection has been suspended by a court order. The court further held that the Kenya Revenue Authority (KRA) cannot claim taxes from a taxpayer when it has been restrained by a court order from doing so.

While awaiting further updates on the cases filed before the High Court, taxpayers ought to comply with all existing tax laws.

As we await further developments from the courts, we summarise the salient amendments to tax legislation introduced through the Act

Download the Article