BY SAM ALFAN.
Attorney General has moved to the Court of Appeal seeking to lift an order suspending Finance Act, 2023 arguing that the government will lose revenue amounting to Sh211 billion in the Financial 2023/24.
In application lodged before the appellate court, Attorney General Justin Muturi has pleaded wih the court to lift the order arguing that the freeze is hurting government operations.
“There be a stay of the conservatory orders of Thande J made on 10th July 2023 in Nairobi High Court Petition E181 of 2023 Okiya Omtatah and others v the Cabinet Secretary for the National Treasury and Planning and others. For the avoidance of doubt, the order suspending the Finance Act, 2013 and the order prohibiting the implementation of or giving effect to the Finance Act, 2013 be lifted/held in abeyance pending the hearing and determination of the intended appeal,” pleads the government legal adviser.
Muturi argues that the suspension of the Finance Act 2023 has the effect of halting the core operations of the government and its stands to suffer great financial loss in reduced revenue collection.
He argues that the Finance Act, 2023 was enacted to boost revenue collection which is the core source of funding for the implementation of the national budget.
Its suspension, he said, will make the Government incapable of meeting its financial commitments and discharging its executive authority.
“If a stay of the conservatory orders is not granted, the Government stands to lose revenue which cannot be recoverable and yet it has an appeal with a high probability of success and which it should be allowed to prosecute,” says AG.
Muturi said unless the application is heard and determined urgently, there is a real risk that the application will be rendered nugatory as the effects of the suspension of the Act would be irreversible, if the intended appeal is successful.
In an affidavit Treasury CS Njuguna Ndung’u has supported the application saying the government stands to lose approximately Sh211 billion in the Financial year 2023/24.
“This means that the Government will not be in a position to implement the 2023/24 budget as planned. Some projects have to be suspended. If it has to implement the budget as planned, it has to borrow more hence increasing the national debt and this will also cause a rise in the rate of inflation,” says Treasury boss.
He further argues that the Government has to borrow to bridge the gap in order to operate and all government projects have to be suspended. As there are no saving provisions in the Finance Act, 2023, the repealed provisions of the Finance Act 2022 has the effect of affecting revenue collection leading to service disruptions for already budgeted revenue.
According to CS Ndung’u, the fiscal plan is disrupted as the forgone collections has to be factored in the expenditure and projects that would go unfunded and there will be an increase in debt stock as then revenue will be affected.
He adds that this is limited because of the debt ceiling and the suspended Act, collaterally suspends the Appropriations Act at both County and national level. This suspension affects debt service and access to consolidated services. Technical default.
“I believe that the conservatory orders if left in place will create a constitutional crisis of unimaginable proportion and there is sufficient cause to stay the conservatory orders having regard to the overriding public interest which requires that the Government be allowed to continue operating unimpeded,” states Prof. Ndung’u.
However, Busia Senator Okiyah Omtatah has opposed the set aside of the orders arguing that Treasury CS have not disclosed why orders sought should be granted.
According to the senator,the conservatory orders in force should be maintained as they were issued to preserve the main motion where, among many other issues, the High Court has been moved to invoke its jurisdiction to determine the legal and constitutional validity, first, of the Finance Bill, 2023 and the resultant Finance Act, 2023.
it is instructive that when the applicants made a similar application verbally immediately the Honourable Court had delivered the Ruling appealed against, the Court declined to grant their prayers, pointing out clearly that doing so would allow the Finance Act, 2023 to immediately come into effect, and that that would render the petition moot or academic, yet the motion raises weighty issues which required to be heard and determined by an expanded bench of three or more judges of Court.
He argues that AG and Treasury CS have not argued that the petition does not raise a substantive question of law. And that being the case, it is necessary that the conservatory orders are maintained to preserve the substantive question of law, so that the bench, when empanelled, will have the opportunity to hear and determine the matter on merit.
“In view of the above, it is meritless for the applicants to argue that the conservatory orders should be lifted simply because they are unreasonably apprehensive that that the Chief Justice will delay in empanelling the bench of judges to hear the case,” says the senator.
