Kenya's Court of Appeal has declared the government's 2023 finance bill unconstitutional, inflicting a new blow to the government of President William Ruto who withdrew this year's finance bill after deadly protests.

The court's verdict was in respect of an appeal of another one from the High Court late last year, which largely left the finance bill intact, only striking out the housing levy.

"A further declaration is hereby issued that the failure to comply with this constitutional dictate renders the entire Finance Act, 2023 unconstitutional," a three-judge bench of the Court of Appeal said in a ruling.

The finance bills are presented to parliament at the start of every financial year and are the main vehicle for the government to set out its revenue-raising measures including tax hikes and the introduction of new levies.

The 2023 version was challenged in court following a round of political opposition-led street protests that turned violent, after Ruto's government used it to double the value added tax on fuel, introduce a housing tax, and raise the top personal income tax rate, among other measures.

Kenya's government pushed through a new law to allow it to continue collecting the housing tax after that ruling and that law is also being challenged in court.

Ongoing protests

The government, which has been relying on the 2023 finance law to continue collecting taxes after Ruto withdrew this year's bill, did not immediately comment on the ruling.

Despite President William Ruto's decision to dismiss nearly his entire cabinet following nationwide protests by young people, the anti-government demonstrations have evolved into demands for his resignation.

The government now can appeal the Court of Appeal ruling at the Supreme Court, which is the highest court.

Nor the Chief Minister Musalia Mudavadi or the top official at the finance ministry, Chris Kiptoo, did respond to requests for comment.

Ruto has nominated a new finance minister after he fired all ministers but one in response to the youth-led violent protests that started last month.

He says the higher taxes are necessary to enable the government to fund development programmes while paying off a heavy public debt load that currently exceeds the recommended level by the International Monetary Fund (IMF) and the World Bank.

The government has submitted a new economic plan to the IMF and it expects the board of the fund to consider it at the end of August.

(with newswires)