Public Participation: The Tax Collector's Nightmare

On 23^rd February 2024, Mzalendo Trust published a blog titled, “Is Null & Void the new budget line for Mwananchi’s taxes.?” In the blog, Mzalendo highlighted among other things, how a lot of Acts of Parliament passed by the House on the Hill, quickly saw the end of their cycle as courts declared them unconstitutional shortly after. In that same blog, Mzalendo Trust highlighted how in October 2020, the High Court had nullified an astounding 23 Acts of Parliament, among them – the Finance Act, 2018. It is again in that same blog that solutions to this costly and mortifying cycle were highlighted – among them – utilising the pre-publication stage in the process of enactment of laws. So, did the judgment of the Court of Appeal on 31^st July 2024 declaring the Finance Act 2023, come as a surprise? Your guess is as good as ours.

The Court of Appeal in rendering its recent judgment, stated that at the base of the Finance Act 2023, sat two fundamental flaws – 

1. That the Act had not been subjected to a proper and meaningful Public Participation process as the National Assembly failed to give reasons for adopting and rejecting proposals received from the public; and
2. That since revenue estimates were not included in the Appropriation Bill, 2023, then the process leading to enacting the Appropriation Act, 2023 and the Finance Act, 2023, did not comply with the constitution which aptly stipulates that the estimates of revenue and expenditure should be submitted to the National Assembly two (2) months before the end of each financial year.

One then can’t help but ask, why? Why the endless flaws and incessant failure to adhere to Constitutional principles and provisions during the legislative process? 

What is the cost of this judgment?

First, it is important to note that after the withdrawal of the Finance Bill 2024, Kenya continued operating under the Finance Act, 2023. The ripple effect of the judgment of the Court of Appeal is that Kenya is now faced with uncertainty in its tax framework and policies, as employers, employees and Kenyans at large continue to grapple with the implications of the judgment.

Secondly, the National Treasury has stressed that if the judgment of the Court of Appeal is to be effected, then the National Treasury stands to lose 164 Billion in revenue. Moreover, Kenyans continue to raise questions on the legitimacy and credibility of not only the legislative process but also government institutions, as a fundamental law with such magnitude is declared unconstitutional from its onset for having veered off the constitutional requirements.

The judges in arriving at the decision pointed out that public and state officers are bound by national values and principles of governance, neatly captured under Article 10 of the Constitution of Kenya. Among our national values and principles are transparency, accountability and participation of the people. It is, therefore, astounding that fourteen years after the promulgation of the Constitution of Kenya, 2010 – Kenya still lacks national legislation on Public Participation. Whilst the courts have over the years tried to pronounce themselves on the issue and underscored the importance of a comprehensive Public Participation framework, the same is yet to be achieved and our wish as a country to be a strong participatory democracy continues to exist only in thin paper.

With all the foregoing in mind – Kenyans ask, are the courts the enemies, or are they the saviours? Are they villains, or guardians of our cherished Constitution? How costly should costly be, before adherence to the Constitution becomes a norm? Another nullification? Another failed appeal, maybe? 

Posted by Loise Mwakamba on Aug. 9, 2024

Categories:  public participation   Parliament independence