'UNCONSTITUTIONAL'

Omtatah wants law removing interest caps suspended

Says the bill died the moment it was declared that the House had only 161 members during a session to vote on it.

In Summary

• Omtatah says the new law is unconstitutional because the presidential reservation on it was not subjected to public participation.

• He questions the validity of the new law which he says courts need to pronounce itself on

https://www.the-star.co.ke/business/kenya/2019-10-17-uhuru-rejects-rate-caps-in-finance-bill/

Activist Okiya Omtatah.
Activist Okiya Omtatah.
Image: FILE

Activist Okiya Omtatah has filed a case seeking to suspend the Finance Act, 2019, which provides for the removal of bank interest rates cap.

Omtatah says the new law is unconstitutional because the presidential reservation on it was not subjected to public participation.

He questions the validity of the law which he says the court needs to pronounce itself on.

However, pending the determination of his case, he wants a temporary order suspending the law to ensure his case is not overtaken by events.

He says the bill died the moment it was declared that the house had only 161 members. 

It meant, he says, those opposed to the amendments had failed to raise requisite numbers to override the President’s veto, yet those in support had equally failed to meet a threshold of a simple majority.

“The speaker of the National Assembly was wrong to thereafter present a dead Bill to the President for assent because the Finance Bill died pursuant to article 115 (4) and (5) of the Constitution when it failed to garner support of the two thirds of members of National Assembly to override the President’s veto.”

As a result, he believes that it was unconstitutional for the speaker to determine the fate of the amended Finance Bill 2019 in Parliament without subjecting it to a vote simply because there were only 161 MPs in chamber, far less than the 233 majority required.  

“The petitioner reasonably suspects that the speaker did so deliberately to avoid the possibility of the Bill being defeated or dying pursuant to article 221 (2) (b),” says Omtatah.

Uhuru vetoed the decision by MPs to retain the interest rate cap in the Finance Bill, 2019.

In a memo sent to Parliament, Uhuru asked the lawmakers to repeal section 33 (b) of the Banking Act.

The Finance Act 2019, among other provisions, repeals section 33 (b) of the Banking Act that provides for the capping of bank interest rates.

The new law also introduces a tax on income raised from the digital marketplace as a measure of ensuring equity in taxation.

The repeal of section 33 (b) of the Banking Act is expected to enhance access to credit by the private sector especially the Micro, Small and Medium Enterprises (MSME's) as well as cut out exploitative shylocks and other unregulated lenders.

The Finance Act 2019 exempts the National Housing Development Fund from income tax.

Yesterday Omtatah said the national assembly misrepresented facts and misapplied law by declaring that the presidential reservation was fully accommodated.

He has sued the attorney-general, speaker of the national assembly and Treasury CS.