The Finance Act,2023
has earned so much notoriety that the laurels have become withered. Its
publicity stems from the fact that it introduced new tax bands. Of the many
taxes introduced, the housing levy seems to be most popular but with negative
publicity. Upon assent into law on 26th June,2023, the Act was
resisted by filing eleven (11) constitutional petitions challenging the
legislative process leading to the enactment and the constitutionality of
provisions of the Act. Of the many assaults to the Act, public participation as
a national value and principle of governance has attained new status and the
Court of Appeal has broken customary jurisprudence and hold that, Parliament
after conducting public participation is obligated to give reasons for
rejecting or adopting the proposals received.
The controlling jurisprudence
on public participation is the Supreme Court decision in SC Petition No. 5
of 2017-British Tobacco Kenya Plc -Versus- Cabinet Secretary for the Ministry
of Health and Others [2019] eKLR (the BAT case) which enunciated the
guiding principles on public participation and inclusive and effective
representation and integrity and transparency of the process are listed as components
of meaningful public participation. When the Court of Appeal hold that, Parliament
after conducting public participation is obligated to give reasons for
rejecting or adopting the proposals received, is it aligned with the Supreme
Court decision in BAT case, or it is a departure from the precedent?
The High Court on its
part held that, there is no express obligation on Parliament to give
written reasons for adopting or rejecting any proposals received from members
of the public. Nonetheless, we think that in order to enhance accountability
and transparency, it is desirable that the relevant committee, after conducting
public participation gives reasons for rejecting or adopting proposals received.
The need for giving reasons for rejecting or accepting proposals received
from the public is to enhance transparency and accountability. But this is just
obita dictum. The Court of Appeal elevated this obita dictum to ratio
decindi. In its holding, the Court of Appeal recalled the preamble of the
Constitution on aspirations of the people and that the values espoused in
Article 10 (2) are neither aspirational nor progressive; they are immediate,
enforceable and justiciable. Therefore, transparency and accountability on the
handling of the public views by Parliament are critical components of our
participatory democracy. Vesting in Parliament arbitrary power to reject or
ignore the contribution from the public without explanation or justification is
the surest way of undermining public participation. The increased role of
transparency and accountability in public participation, makes the twin
national values and principles of governance, broad and all-inclusive in their
reach, sweeping in their sway and peremptory in their command and failure to
adhere them, is unmitigated unconstitutionality, illegality and irregularity.
As a compliance
prerequisite for public participation henceforth, Courts should ascertain
whether the public participation has been done in a manner that rationally
connects. the consultation with the constitutional purpose of accountability,
responsiveness and transparency. The holding by the High Court and previous
Court decisions that, Parliament is not obligated to give reasons for accepting
or rejecting views, is the surest way of rendering public participation
illusory, cosmetic and a mere formality or public relations exercise, which the
Supreme Court frown on in the BAT case.
In the end, the Court
of Appeal reversed the High Court decision and held that, failure by Parliament
to give reasons for accepting or rejecting the public views in enactment of the
Finance Act,2023 was a violation of Article 10 (1) and (2) (c) of the
Constitution rendering the entire Finance Act,2023 unconstitutional. The
holding by the Court of Appeal by all probabilities will be subjected to an
appeal to the Supreme Court and it will be interesting to see the decision of
the apex in light with the BAT case.
Prepared by:
PATRICKS LAW ASSOCIATES
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Written by Moses
Masai
