The Supreme Court is now poised to give the final word on the legality of the National Treasury’s powers to grant tax exemptions through gazette notices, an issue that has already seen the High Court strike out a fresh petition on similar grounds.
This comes after a judgment delivered by Justice Chacha Mwita on July 22, struck out a challenge filed by one, Magare Gikenyi, who had sought to question the constitutionality of Section 13(2) of the Income Tax Act, the provision that allows the Treasury to exempt certain incomes from taxation through a gazette notice.
Mwita noted that the issue is already pending before the Supreme Court in Petition E006 of 2025, which arose from an earlier case where the Court of Appeal upheld the validity of the law.
Justice Mwita told the parties that the High Court could not pronounce itself on a matter that is actively being considered by a superior court.
While agreeing that the challenge raised serious constitutional issues on public finance management and the limits of executive power, Mwita said it would be inappropriate for his court to make any determination while the country’s highest court is seized of the dispute.
He emphasised the need for judicial consistency and respect for the hierarchy of courts, noting that a contrary ruling would only cause complications.
The judge said his decision to strike out, rather than dismiss the petition, was deliberate, to ensure that the petitioner could return to court should the Supreme Court deliver a decision that reopens the door for further challenges.
“Once the Supreme Court renders its decision, you can always file another petition. That’s why I did not dismiss the petition but struck it out — to enable the party to come back should circumstances change, rather than making the matter res judicata," the judge told Gikenyi.
The ruling also came before an attempt by the petitioner to orally apply for a review of the judgment, citing alleged errors and new evidence.
However, the Attorney General’s counsel, Kaumba, opposed the application, clarifying that while the Court of Appeal had upheld Section 13(2), the matter is now fully before the Supreme Court.
“The petition of appeal is pending determination before the Supreme Court, parties have filed their responses, and we are awaiting a hearing date before the Supreme Court,” the lawyer stated.
Justice Mwita advised Gikenyi to file a formal application if he wished to pursue that route, setting timelines for submissions by both sides.
The Supreme Court case stems from a long-running legal battle over Section 13(2) of the Income Tax Act, a provision that empowers the Cabinet Secretary for National Treasury to grant tax exemptions through gazette notices.
These exemptions have historically been used to facilitate foreign-funded government projects, often tied to bilateral or multilateral agreements.
The first major challenge to this provision came through the High Court petition filed by Eliud Matindi.
In 2023, the High Court ruled in favour of the petitioners, declaring Section 13(2) unconstitutional on the grounds that it violated Article 210 of the Constitution, which requires taxation matters, including exemptions, to be explicitly provided for in law, typically through legislation passed by Parliament.
The Attorney General and Treasury, however, appealed, leading to the Court of Appeal’s decision in Civil Appeal E330 of 2023, which overturned the High Court ruling.
The appellate judges found that the Treasury’s powers under Section 13(2) are a legitimate form of delegated legislative authority, permitted under Article 94(5) of the Constitution.
They also ruled that exemptions linked to government-to-government agreements did not require the same level of public participation as ordinary laws, given their nature and context.
Unhappy with the appellate court’s ruling, the matter has
now been escalated to the Supreme Court for determination.
