President Uhuru Kenyatta is facing a huge blow after a High Court ruling on Wednesday.
According to the ruling by the high court the proposed Robin Hood taxes in the Finance Bill 2018 was unconstitutional.
In addition the court ruled that the Treasury erred in instituting collection before enactment.
Justice Wilfrida Okwany ruled that the Finance Bill 2018 cannot be implemented before it becomes Finance Act.
“The provisional collection of Taxes and Duties Act 415 and the provisional collection of taxes and duties 2018 fail the constitutional test of validity,” ruled Justice Okwany.
According to the judge, the Finance Bill 2018 cannot be implemented before it becomes Finance Act.
She further stated that the Bill should have gone through the Parliamentary legislative process laid out in the constitution for approval and adoption by parliament and final assent by the president.
Last month, MPs rejected the introduction of new legislation targeting bank transfers allowing Treasury to tax 0.05 per cent on bank transfers above Sh500,000.
The MPs had complained that this would open the door for Government to tax employees’ salaries.
In July Rights Activist Okiya Omtata moved to court seeking to bar the National Treasury and Kenya Revenue Authority (KRA) from implementing any taxes proposed in the Finance Bill 2018.