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President Ruto vowed to introduce new taxes if the High Court blocks the Finance Act of 2023


The Finance Act of 2023 is a piece of legislation that introduces new brackets for all incomes up to Ksh 6 million at 32.5% and incomes above Ksh 9 million at 35% as the government seeks to boost the tax revenues.

Kenyan President William Ruto is ready to introduce a new set of taxes if the High Court were to block the Finance Act of 2023. The new set of taxes includes road and vehicle circulation tax, changes to excise, and value-added tax.

The Finance Act of 2023 was passed by the Kenyan Parliament on June 26, 2023, and received Presidential assent on the same day. The Act introduces a number of changes to the Kenyan tax landscape, which include an increase in the turnover tax rate from 1% to 3%, the removal of exemptions for capital goods used in the manufacturing sector, the introduction of a digital asset tax, an increase in the excise duty on cigarettes and alcoholic beverages, and the introduction of a 20% deposit requirement for taxpayers appealing to the High Court from the Tax Appeals Tribunal.

The Finance Act of 2023 is a significant piece of legislation that will have a major impact on the Kenyan tax landscape. The changes introduced by the Act are intended to raise revenue for the government and to encourage economic growth. However, some of the changes have been met with resistance from businesses and individuals.

The implementation of the Finance Act of 2023 has been suspended by the High Court pending a judicial review of the Act. The Court has ruled that the Act is unconstitutional because it violates the right to property.

The Court found that some of these changes violate the right to property, which is protected under the Kenyan Constitution. The Court ruled that the increase in the turnover tax rate and the removal of exemptions for capital goods used in the manufacturing sector are disproportionate and excessive. The Court also ruled that the introduction of a digital asset tax is unconstitutional because it does not meet the definition of "property" under the Constitution. The government has appealed the Court's ruling, and the case is currently pending before the Court of Appeal.

President Ruto has said that he is "not afraid" of the Court's ruling, and that he will introduce new taxes if necessary to raise revenue for the government. He has said that the new taxes could include a tax on digital transactions, a tax on luxury goods, and a tax on high-income earners.

The legal authority of President Ruto to introduce new taxes, if the courts block the Finance Act, is a complex issue. The Constitution of Kenya gives the President the power to introduce new taxes, but it also gives the courts the power to strike down laws that they deem unconstitutional.

If the courts block the Finance Act, it is possible that they would also strike down any new taxes that President Ruto introduces. This is because the new taxes would likely be based on the same provisions of the Constitution that were found to be unconstitutional in the Finance Act.

President Ruto's announcement has been met with mixed reactions. Some people have welcomed the news, saying that it is necessary to raise revenue for the government. Others have criticized the move, saying that it will only burden Kenyans further.

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