On 26 June 2024, in response to two weeks of widespread anti-tax protests across major towns and cities in Kenya, President William Ruto recently announced, during a press briefing, the withdrawal of the controversial Finance Bill, 2024 (the Bill). Originally published in the Kenya Gazette on 9 May 2024 and subsequently passed by Parliament on 25 June 2024 amidst nationwide demonstrations, the Bill proposed several amendments, including the introduction of VAT on bread and taxes on products such as diapers and sanitary towels, among other significant measures likely to increase the cost of living. For a detailed review of the Bill and the proposed tax measures, please refer to our analysis of the Finance Bill 2024.

28 June 24

Shortly after the press briefing, the President issued a Presidential Memorandum of Referral dated 26 June 2024. Exercising the powers conferred under Article 115(1)(b) of the Constitution of Kenya, the President referred the Bill back to Parliament, thereby declining to assent to it. The President expressed reservations regarding the entire content of the Bill and recommended the deletion of all its clauses.

This decision marks a pivotal turning point in Kenya’s budget-making process. The Bill aimed to generate additional tax revenue of KES 346 billion (approx. USD 2.7 billion) to finance a budget of KES 3.68 trillion (approx. USD 30 billion). This fiscal gap will now need to be addressed through non-tax revenue measures, additional borrowing, or amending the Appropriations Bill to reduce government expenditure.

In his speech on 25 June 2024, the President alluded to the third option, indicating that the National Treasury would collaborate with various government arms to reduce their expenditure budgets and introduce austerity measures to operate within the existing revenue framework.

Article 115 of the Constitution outlines the procedure for presidential assent and referral of bills. Article 115(1) stipulates that the President must, within fourteen (14) days of receiving a bill, either assent to it or refer it back to Parliament for reconsideration, noting any reservations. Upon referral, Parliament may amend the bill in light of the President’s reservations or pass it a second time without amendments.

Given the President’s recommendation to delete all clauses of the Bill, it is anticipated that Parliament will fully accommodate this recommendation. However, it is important to note that the existing legal framework does not envisage the deletion of all clauses in a referred bill. We anticipate that the Speaker of the National Assembly will guide on the appropriate procedure to result in the Bill being rendered vacated.

Standing Order 154 of the National Assembly’s Standing Orders requires consideration of the President’s reservations within 21 days of the date when the House next meets. A Notification of Recess issued on 26 June 2024 indicated that the National Assembly would resume regular sittings on 23 July 2024. We anticipate that the Speaker of the National Assembly may convene a special sitting to consider and vote on the President’s referral and recommendations to reject the Bill.

The Public Finance Management Act (Act No. 18 of 2012) (the PFMA) mandates that a finance bill be assented to by 30 June of each year. Consequently, the Government faces a closing window to enact the Finance Act within the current fiscal year’s budgetary cycle. This will be the first time in recent history that the President has not assented to a Finance Bill by expressing reservations on all its provisions.

Furthermore, the PFMA also requires that the Appropriation Bill be passed by 30 June of each year. Noting that the Appropriation Bill was passed by the National Assembly on 25 June 2024 and there are no public reports of its referral to Parliament by the President, it is not clear whether the Appropriation Bill will be assented to before 30 June 2024, noting that the National Assembly would be required to follow a separate approval process under the PFMA for payments to be made out of the National Exchequer after 1 July if the Appropriation Bill is not enacted by 30 June. In any event, it would be expected that Government will review and adjust the recently approved budget estimates and implement further austerity measures, and the public will be curious to see what happens to the Appropriation Bill.

Should you have any questions on this legal alert, please do not hesitate to contact Daniel Ngumy, Kenneth Njuguna or Dennis Chiruba.


1. Salma Khamala – Principal Associate
2. John Kiragu – Associate
3. Trevor Ngile – Trainee Lawyer