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REUTERS
NAIROBI
KENYA'S High Court has temporarily blocked tax hikes designed to fund a range of government development goals, including the provision of affordable housing.
The court suspended a 0.05 percent tax on bank transfers above 500,000 shillings ($4,967.71) and a two percentage point increase in excise duty on mobile money transfers.
It also suspended a range of other new tax measures in a separate ruling late on Thursday. The suspensions will remain in force until the cases are heard in September.
The moves followed a complaint brought by the Kenya Bankers Association, an umbrella lobby for lenders, which says the transfers tax is hard for banks to enforce.
A separate suit filed by a member of the public argues Finance Minister Henry Rotich cannot impose taxes before parliament has passed the budget.
Rotich said last month the levies would help generate an extra 27.5 billion shillings for the fiscal year starting this month. He declined to comment on the court rulings during a news conference at the Treasury on Friday.
President Uhuru Kenyatta, sworn in for a second and final term last November, has made universal healthcare, affordable housing, food security and the manufacturing sector his"Big 4"priorities. However, the tax measures, which also aim to cut the fiscal deficit, have angered many people and groups in the economy.
The"Robin Hood"tax on large bank transfers has particularly worried the financial sector.
Jibran Qureishi, economist for East Africa at Stanbic Bank, said it would stifle tax payments, interbank lending and decimate the fund management industry which has to move around huge volumes of cash between accounts.
