Two advocates have moved to the High Court seeking to suspend the implementation of several provisions of the Finance Act 2026, arguing that the law was enacted in violation of the Constitution and threatens the rights of millions of Kenyans.
In a constitutional petition filed before the Constitutional and Human Rights Division, advocates Kabuga Violet Njeri and Martine Kiptoo are asking the court to declare several provisions of the Act unconstitutional and issue conservatory orders halting their enforcement pending the hearing and determination of the case.
The petition, filed against the National Assembly, the Senate, the Attorney General, the National Treasury Cabinet Secretary, the Kenya Revenue Authority (KRA) and the Speaker of the National Assembly, contends that Parliament failed to conduct meaningful public participation before passing the legislation.
"The Finance Act 2026 contains provisions of far-reaching fiscal consequence that were not adequately consulted upon with the public," the petition states.
Among the provisions under challenge are a new 25 per cent excise duty on mobile phones charged upon activation, a new tax regime targeting non-resident landlords, expanded reporting obligations for virtual asset service providers, and new anti-tax avoidance measures that grant the KRA Commissioner wider powers.
The petitioners argue that these measures violate several constitutional rights, including the right to fair administrative action, property, privacy, equality, fair hearing and public participation.
They particularly fault provisions allowing KRA to determine tax liabilities based on broad definitions of "tax avoidance schemes", issue assessments at its discretion, and collect taxes from third parties without first giving taxpayers a hearing.
"There is no requirement for a prior hearing, no objective standard, and no statutory procedure for challenging the determination before it is acted upon. This is a flagrant violation of Article 47 of the Constitution," the petition says.
The lawyers also challenge provisions requiring virtual asset service providers to submit detailed information on users and permitting automatic exchange of such information with foreign governments.
According to the petition, "the indiscriminate mass collection and cross-border sharing of citizens' financial data... constitutes an unjustifiable infringement of the right to privacy."
They further argue that taxing gambling winnings on gross rather than net income, denying tax deductions where suppliers fail to comply with the electronic Tax Invoice Management System (eTIMS), and imposing higher tax rates on non-resident landlords amount to discriminatory taxation.
The petition seeks declarations invalidating the impugned provisions, an injunction restraining KRA from enforcing them, and orders compelling the National Treasury and Parliament to disclose records of public participation and the fiscal impact assessments undertaken before the law was enacted.
Justice Gregory Mutai has directed the petitioners to serve the respondents within three working days. The respondents have seven days after service to file their responses.
The application for conservatory orders will be heard on July 20, 2026, with parties directed to file skeleton submissions before the hearing.
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