Highlights of the Impact of the Court of Appeal’s Decision Declaring the Entire Finance Act 2023 Unconstitutional

On 31 July 2024, the Court of Appeal rendered its judgement in relation to the constitutionality of the Finance Act 2023. The Court of Appeal found that the entire Act was unconstitutional.  

This article summarizes the key amendments introduced by the Act and the implications of the Court’s decision on their applicability. These implications are subject to change depending on the outcome of the appeal currently pending determination at the Supreme Court.

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The Finance Act, 2023 was signed into law by the President on 26 June 2023. The Act introduced significant and impactful changes to the tax laws including introducing new taxes such as the digital asset tax and the repatriated income tax and increasing the highest personal tax bands to include 32.5% and 35%.

The Government has since appealed to the Supreme Court against this decision. However, as of the time of publication of this article, no conservatory orders have been issued staying the Court of Appeal’s judgement.

The Court of Appeal found that the entire Act was unconstitutional for:

• violating Article(s) 220 (1) (a) and 221 of the Constitution as read with sections 37, 39A, and 40 of the Public Finance Management Act which prescribe the budget making process; and
• failure by Parliament to provide reasons for adopting or rejecting any proposals from members of the public during the public participation process. 

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Read the full publication at IKM Advocates