The Status of the Kenya Finance Bill, 2024 from a Legal Perspective as at 9th July 2024

Legislative Process and Legal Provisions

1. Introduction and First Reading:
   • The Finance Bill is first introduced in the National Assembly, marking the beginning of its legislative journey.
   • During the First Reading, the bill’s title is read, and copies are distributed to Members of Parliament (MPs). There is no debate at this stage.
2. Second Reading:
   • The bill proceeds to the Second Reading, where MPs debate its principles and policies.
   • At this stage, the bill’s overall merits are discussed. Amendments may be proposed, and a vote is taken at the end of the debate.
3. Committee Stage:
   • Detailed scrutiny of the bill occurs during the Committee Stage. A committee of the whole House or a relevant departmental committee examines the bill clause by clause.
   • Specific amendments are proposed and debated. The committee reports back to the whole House with its recommendations and any amendments.
4. Third Reading:
   • The Third Reading focuses on the final version of the bill, incorporating any amendments made during the Committee Stage.
   • MPs debate the overall content and purpose of the bill before taking a final vote.
5. Presidential Assent:
   • After passing the National Assembly, the bill is sent to the President for assent.
   • The President may either assent to the bill, making it law, or refuse assent and return it to the National Assembly with recommendations for reconsideration.

Current Status of the Kenya Finance Bill, 2024

1. Rejection by the President:
   • On June 27, 2024, President William Ruto declined to assent to the Finance Bill, 2024, due to widespread public protests and dissatisfaction. He returned the bill to the National Assembly with recommendations to delete all its clauses​ (JURISTnews)​.
2. Public Opposition and Protests:
   • The bill faced significant opposition, primarily due to proposed taxes on essential goods and services, and controversial amendments to the Data Protection Act allowing the Kenya Revenue Authority (KRA) to access financial data without court orders​ (Wikipedia)​​ (PaySpace)​.
   • Protests against the bill turned violent, leading to casualties and widespread public unrest​ (Wikipedia)​.
3. Legal and Constitutional Framework:
   • Article 115(1)(b) of the Constitution of Kenya allows the President to refuse assent to a bill and return it to the National Assembly with recommendations.
   • The National Assembly must reconsider the bill within 14 days of the President’s refusal. If no action is taken within this period, the bill is deemed passed​ (JURISTnews)​.
4. Current Legislative Actions:
   • With the National Assembly in recess from June 26 to July 23, addressing the bill within the 14-day period presents a challenge.
   • The Speaker of the National Assembly has the authority to call a special session to address the bill within the stipulated period, but there has been no indication of a special sitting being called​ (JURISTnews)​.
5. Potential Outcomes:
   • If the National Assembly acts on the President’s recommendations and amends the bill, it will be sent back to the President for assent.
   • If no action is taken within the 14-day period, the bill may be deemed passed, potentially leading to legal challenges based on procedural grounds.

Key Provisions in the Finance Bill, 2024

• Eco Levy: Introduction of a levy on environmentally harmful imported products.
• Data Protection Amendments: Allowing KRA access to financial accounts without court orders.
• New Taxes: Imposing new taxes on motor vehicles, digital marketplace sales, and essential goods such as bread and fertilizers.
• Excise Duty: Increasing excise duty on fuel, alcoholic beverages, cigarettes, and other products.
• Withholding Taxes: New withholding taxes on payments made to public entities and on infrastructure bonds​ (Wikipedia)​​ (PaySpace)​.

Conclusion

The Kenya Finance Bill, 2024, remains in a state of legislative reconsideration following the President’s refusal to assent. The National Assembly must navigate constitutional provisions and public sentiment to resolve the bill’s status. Continuous monitoring of parliamentary actions and legal advisories is essential for stakeholders to stay informed on developments.

For specific legal guidance on the Finance Bill, 2024, please consult B M Musau & Co., Advocates LLP.

Dr. Benjamin Musau

I am a Kenyan Advocate and the Managing Partner of B M Musau & Co., Advocates, a position I have held since 1999. My work encompasses regulatory reforms, reduction of administrative burdens, the structure of business entities, joint ventures, acquisitions, banking, foreign investment and other general corporate areas