After withdrawing the 2024-2025 budget project at the end of June following strong protests in the country, the Court of Appeal annulled the 2023 public finance law on Wednesday, July 31, 2024. A law promulgated in June 2023 on which the president was counting to finance his budget. Highly controversial for its numerous taxes, it had already led to demonstrations and been the subject of a legal appeal at the time.
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With our correspondent in Nairobi, Albane Thirouard
The three judges of the Court of Appeal listed irregularities in parliamentary procedures and considered that the law was “ fundamentally flawed and therefore unconstitutional “.
For President Ruto, this is a new blow, after having already had to withdraw his highly contested 2024 Finance Act. He was counting for the moment on the measures put in place by the 2023 Act to finance the expenses of his administration.
It had been promulgated in 2023 in order, according to him, to reduce the weight of the country’s public debt. A debt estimated at 71 billion euros, which represents approximately 70% of Kenya’s GDP. To increase the revenue of the cash-strapped state, the 2023 law had increased or introduced new taxes, on the price of fuel or on the highest salaries for example. With the verdict of the Court of Appeal, these measures are now no longer applicable.
William Ruto had already announced budget cuts last month. More will now be needed, says economist Michael Chege. He is concerned that the court decision could jeopardize the IMF’s support for Kenya. The financial institution is due to approve its new tranche of aid for the country at the end of the month.
The government may still decide to appeal the court decision to the Supreme Court.
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