NAIROBI, Kenya, June 16 – A petition has been filed at the High Court seeking to halt the implementation of several provisions contained in the Finance Bill, 2026, pending the court’s determination of their constitutionality.
Through Tali Tali Advocates, the Consumer Federation of Kenya (COFEK) is seeking conservatory orders to suspend proposed changes relating to royalties, withholding tax on scrap metal transactions and the removal of selected VAT exemptions.
The petition argues that some of the proposed tax measures raise serious constitutional concerns, particularly the introduction of withholding tax on gross proceeds from scrap metal transactions, which COFEK says could disproportionately affect low-income earners and participants in the informal sector.
According to the court filing, the lobby group is also challenging the proposed removal of VAT zero-rating on selected essential goods and services, arguing that the government has not adequately disclosed the likely economic and social impact of the changes.
Further, the petition questions provisions that could potentially place Kenya in conflict with its obligations under the Treaty for the Establishment of the East African Community and the East African Community Customs Union Protocol.
COFEK also argues that public participation requirements under Articles 10 and 118 of the Constitution were not fully met because some of the proposed measures were not sufficiently explained to allow meaningful public engagement.
“Pending the hearing and determination of this Petition, this Honourable Court be pleased to issue a conservatory order restraining the 1st and 2nd Respondents, whether by themselves, their officers, servants, agents or persons acting under their authority, from implementing, operationalising, enforcing or giving effect to the impugned provisions challenged in the Petition,” the court filing states.
The petition further asks the court to allow the proceedings to continue as a constitutional challenge should the Finance Bill be enacted before the case is concluded.
“Should the Finance Bill, 2026 be enacted into law prior to the final determination of this Petition, this Honourable Court be pleased to order that these proceedings shall continue, without necessity for the institution of fresh proceedings, as a constitutional challenge to the validity and constitutionality of the corresponding provisions of the Finance Act, 2026,” the petition adds.
The case comes as the National Assembly’s Departmental Committee on Finance and National Planning finalises its report on the Finance Bill, 2026, following public hearings and stakeholder submissions.
The National Treasury is targeting between Sh98 billion and Sh120 billion in additional revenue through the proposed tax measures to support the government’s Sh4.84 trillion budget for the 2026/27 financial year.
