According to Bloomberg, an appeals court in Kenya has ruled that a series of taxes introduced in 2023 were unconstitutional, potentially blocking a significant source of budget financing for the government. The taxes, part of the Finance Act 2023, were deemed to have breached Kenya’s budget-making laws, with the court describing the process to enact them as “fundamentally flawed” and unconstitutional. This ruling was delivered by a three-judge bench on Wednesday, as per an emailed copy of the decision.

The taxes in question were expected to generate approximately 211 billion shillings ($1.6 billion) for the fiscal year that ended last month. President Ruto had previously abandoned another set of revenue-raising measures aimed at collecting 346 billion shillings in the current budget year, following weeks of demonstrations that saw protesters storming parliament. The 2023 law included measures such as doubling the value-added tax on fuel to 16%, increasing excise duties on fees for money-transfer services, imposing a 3% tax on digital assets, and raising the top salary-tax band rate to 35% from 30%.

Additionally, the law mandated a 1.5% housing levy for employees, which had to be matched by employers. Despite the court ruling, the government is expected to continue collecting the housing levy, as it enacted separate legislation in response to a previous court decision that had declared such collections illegal.