The paradox of public participation in tax legislation

On 31 January 2023, the High Courts in Nairobi and Kitale rendered judgments on petitions challenging the constitutionality of the Finance Act 2021 and the Finance Act 2022 (the Acts) respectively.

16 Feb 2023 4 min read Tax & Exchange Control Alert Article

At a glance

  • The High Courts in Nairobi and Kitale rendered judgments on petitions challenging the constitutionality of the Finance Act 2021 and the Finance Act 2022.
  • The courts had divergent views on the place of public participation in amendments introduced on the floor of the house, with one court ruling that the contested amendments violated the principles of public participation, while the other court held that the amendments were in line with the original intent of the bill.
  • Public participation in amendments is not governed by substantive law but has been emphasized by the Supreme Court. It should be real, purposeful, meaningful, inclusive, and transparent, and the public should be sensitized on the subject matter. Lack of public involvement in amendments can lead to a lack of public trust and involvement in law-making.

In both petitions, among other pertinent issues raised was the issue of whether public participation was conducted before the passing of the Acts considering that amendments were made to the bills when they were tabled in Parliament. Accordingly, the amendments were not the subject of discussion during the initial public consultations. The courts took divergent views on the place of public participation in amendments introduced on the floor of the house.

When a proposed bill is first introduced in Parliament, it is assigned to a committee that is tasked with facilitating public participation. Appropriate consultation involves discussions with relevant experts in the field of the proposed bill and ensures that people likely to be affected by the proposed statutory instrument have enough opportunity to comment on its content. In cases where consultations are not undertaken, the committee is required to give reasons.

Thereafter, the proposed bill, together with the comments, is presented before Parliament. New amendments can be introduced if the amendments are in line with the original intent of the bill. However, amendments dealing with a different subject or that unreasonably or unduly expand the subject of the bill or are inconsistent are excluded.

Opposition petition

With respect to the Finance Act 2021, the petitioners opposed the introduction of new amendments in the Finance Bill for being unconstitutional. The petitioners stated that while public participation was held regarding the Finance Bill 2021, there was no information given as to the basis for introducing other tax amendments while in Parliament. The contested amendments were not subjected to consultation and thus did not emanate from the public.

The court held that the contested amendments were constitutionally frail because they offended the principles of public participation and consequently violated the right to fair administrative action and the principles of public finance.

Further, the court noted that public participation in policy formation dictates that those most likely to be affected by a policy must have a bigger say in that policy and their views must be deliberately sought and considered. Moreover, given the robust representations that the various stakeholders had made on the proposed taxes in the Finance Bill 2021, the subsequent amendments were not minor but were substantive amendments that required public engagement.

In the same breath, in the High Court in Nairobi, one of the petitioners contested the constitutionality of the Finance Act of 2022 as it contained amendments on new issues that were not part of the Finance Bill 2022 and hence not subjected to public participation.

The petitioners argued that given the consequences of the new amendments on stakeholders, the respondents had a constitutional obligation to procure the views of the public on the amendments before passing the Finance Act 2022.

In this case, while propounding the perimeters of public participation concerning amendments made by parliamentarians, the court took a broad view, holding that the amendments were in line with the original intent of the purpose and object of the bill, which was to amend tax laws. The purpose and objects of a bill are usually set out in the memorandum of the bill.

The court was guided by the parliamentary standing orders, which empower members of the assembly to make additional amendments to bills without consulting the public, through the proper procedure, which entails a reading of the amendment three times. 

Furthermore, the court held that it would derail the legislative process and undermine Parliament’s ability to discharge its mandate if it was required to adjourn proceedings every time a member proposed an amendment to a bill so that further public participation can be carried out.

Principles of public participation

There is no substantive law that provides for how public participation should be carried out. The question of how and when public participation should be carried out has been left open to the interpretation of the court. The proposed Public Participation Bill 2019 attempted to provide a framework for effective public participation. The bill was, however, not passed into law.

The Supreme Court has also previously emphasised the principle of public participation, noting that it is through public participation that Kenyans find their sovereign place in the governance they have delegated to both the National and County Governments. In British American Tobacco Kenya, PLC v Cabinet Secretary for the Ministry of Health and Five Others [2019] eKLR, the Supreme Court laid down the guiding principles of public participation.

Public participation should be real not illusory, it must be purposeful and meaningful, it must be accompanied by reasonable notice and opportunity, it must be inclusive and transparent and the public must first be sensitized on the subject matter.


Balancing rights is a nuanced process, and Kenyan judges have a significant role in interpreting and applying the law in a way that strikes a balance between fundamental rights and the greater good. On one hand, the public must be involved in the law-making process, especially when the greater burden is to be borne by them. On the other hand, parliamentarians as representatives of the people can propose changes in bills on the behalf of people.

Although there is no prescribed legal framework for public participation in amendments, public participation must be real and not an act of public relations. Amendments that have a potentially long-lasting impact on the public must be subjected to consultations in order to achieve the qualitative component of public participation. Otherwise, disclaiming the need for public involvement under the pretext that the amendments are envisioned under the scope of the bill may open the legislative process to mischief which will lead lack of public trust and involvement in law-making.

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