BY SAM ALFAN.

Busia Senator Okiyah Omtatah has challenged the 2023 Finance Bill arguing that it is unconstitutional.

In a case certified as urgent by the High Court, the legislator says taxing members of independent Commission and judges  is unconstitutional.

Omtatah further dismissed the proposal to deduct 3 percent from employees salaries, arguing that the amount deducted cannot buy a house.

The Senator says the amount deducted after seven years will only be Sh420,000.

He argued that Section 76 of the Bill, if it becomes law, threatens to subject taxpayers’ in formal employment to unreasonable administrative action.

He faults the government for proposing a formula which cannot guarantee a house to any person contributing to the so-called Housing Fund, ‘unless there is a hidden poly where some of the contributors will be scammed’. 

“If an employee was to save the maximum amount possible from deductions and contributions amounting to a sum of Sh5000 per month for the seven years it will yield only Sh.420,000.00 (being 5,000 x 12 x 7 = 420,000). There is absolutely no way that Sh.420,000 can be used to finance the purchase of a home under the affordable housing scheme, given that the houses will be permanent structures, or even flats,” says Omtatah in his petition.

The Busia senator adds that several sections in the Finance Bill violate the court the constitution since the affects the Bill of Rights.

He wants the High Court to quash several sections of the Finance Bill 2023 and compel the Treasury to audit the public debt register to separate genuine sovereign debts which were authorised by Parliament and should be repaid by Kenyans from odious debts which were incurred without parliamentary approval or benefitted private entities who should repay them.

He further wants the High Court to declare there are inherent natural law and constitutional limitations on the power of the political arms of Government (the Executive and the Legislature) to impose taxes, which limitations protect taxpayers from unconstitutional taxation.

He further seeks the court to declare that by publishing the Finance Bill 2023 which contains threats to the Constitution, the Cabinet Secretary for the National Treasury and Planning failed in its duty to uphold the Constitution as required at Article 153(2)(a) of the Constitution.

Omtatah wants the court to declare that by publishing the Finance Bill 2023 which contains threats to the Constitution, the National Assembly failed in its duty to uphold the Constitution as required at Articles 93(2) and 94(4) of the Constitution.

He further seeks declaration that by including the impugned amendments to the Statutory Instruments Act, 2013, to the Employment Act, 2007, the Finance Bill violates Articles 109(5) and 114 of the Constitution and ceases to be a ‘money bill and the impugned amendments to the Betting, Gaming and Lotteries Act [CAP. 131], Kenya Roads Board Act, 1999, and the Statutory Instruments Act, 2013, the Employment Act 2007, and the Housing Act (Cap. 117) are amendments to Bills concerning county governments that must be enacted by both the National Assembly and the Senate.

According to Omtatah, the court should declare that before committing public funds to repay public debts, the public debt register ought to be audited to separate genuine sovereign debts which were authorised by Parliament and should be repaid by Kenyans from odious debts which were incurred by regime owners without parliamentary approval or were used to benefit private entities who should repay them.

He argues that the Bill pose threats to express provisions of the Constitution of Kenya 2010, including section 76 of the Bill, proposes to amend the Employment Act, No. 11 of 2007, to introduce mandatory deductions at the rate of 3% of an employee’s monthly basic salary to be paid by employees and a 3% contribution by employers, respectively, into the National Housing Development Fund, established under section 7 of the Housing Act, to finance affordable housing projects.

Notably, the introduction of this levy means that the gross salaries of employees will be subjected to further deductions which will impact their net take-home income.Hence, to the extent that it will interfere with the net salaries of judges, members of constitutional commissions, and holders of independent offices, the proposed law will contravene Articles 160(4) and 250(8) of the Constitution of Kenya, 2010, which forbid such interference with the salaries of those State officers.

He argues that section 76 of the Bill threatens socio-economic rights (Article 43) to the extent that, if made law, the fund will require a 3 percent reduction in basic salary for employees and a 3 percent contribution from employers, thereby reducing worker’s purchasing power as it increases business operating costs.

He further states that section 76 of the Bill threatens to violate the national principles of good governance (Article 10) and rights to fair administrative action (Article 43), for some employers, to the extent this tax will be frustrating specially because the proposed amendment does not define who an employee is for purposes of benefitting from the levy.