Executive summary

On 26 June 2024, the President of Kenya declined to assent to the Finance Bill 2024. In referring the Bill for reconsideration by the National Assembly, the President took note of the widespread expression of dissatisfaction by members of the public on the contents of the Bill.

Detailed discussion

On 26 June 2024, the President of Kenya addressed the nation and issued a Presidential Memorandum of Referral declining to assent the Finance Bill 2024. The President referred the Bill back to the National Assembly for reconsideration with a recommendation to delete all clauses in the Bill. This was in exercise of powers conferred to him by the Constitution of Kenya 2010 in Article 115(1)(b).

The Bill was set to take effect on 1 July 2024 after presidential assent, having successfully passed through all the other stages of the legislative process. (For background, see EY Global Tax Alert, Kenya proposes tax changes under the Finance Bill, 2024, dated 21 May 2024.

Legislative framework

Notably, Article 115 of the Constitution of Kenya 2010, on Presidential assent and referral of Bills, provides that within 14 days of receiving the Bill the President shall either assent to it or refer it back to Parliament for reconsideration, noting any reservations that the President has concerning the Bill. It further provides that Parliament may amend the Bill fully accommodating the President’s reservations. In this case, the Bill is then to be resubmitted to the President for assent.

However, Parliament may also opt to pass the Bill without any amendments or without fully accommodating the President’s reservations. In such a case, the Constitution specifically provides that the Bill should then be resubmitted by the Speaker to the President within seven days. The President would then have seven days to assent to it.

If the President fails to assent to the Bill, fails to refer it back to Parliament within 14 days, or fails to assent to the Bill within seven days after resubmission, the Bill shall be taken to have been assented to at the expiry of the prescribed periods.

Way forward

In the wake of the President’s decline to assent to the Finance Bill 2024, the Speaker of the National Assembly issued a Notification referring the President's Memorandum of Referral to the Departmental Committee on Finance and National Planning to expeditiously commence consideration of the Memorandum's reservations and recommendation and report to the House at the next regular sitting upon its resumption (on 23 July 2024).

Any tax measures can now be introduced through a new Finance Bill or Miscellaneous Tax Amendments Bill that will have to undergo the mandatory public participation process before being enacted into law.