The Teachers Service Commission (TSC) is now free to pay teachers July salaries without making deductions of 1.5% housing fund that is enshrined in the 2023 Finance Act.
This is after the Court of Appeal, yesterday, declined to lift an order suspending the law. The Treasury had moved to the Court of Appeal in its quest to implement the contentious Finance Act.
The bench of three judges said it will rule on the application by Treasury Cabinet Secretary Njuguna Ndung’u, who argued that the suspension of the Act was affecting government operations, on July 28.
Prof Ndung’u moved to the appellate through Attorney-General Justin Muturi arguing that the government stood to lose approximately Sh211 billion in the current financial year, which would make it difficult for the Kenya Kwanza administration to implement the 2023/24 budget as planned.
He further said some of the governments projects have had to be suspended.
“The Government of Kenya has to borrow to bridge the gap in order to operate. As there are no saving provisions in the Finance Act, 2023, the repealed provisions of the Finance Act 2022 has the effect of affecting revenue collection leading to service disruptions for already budgeted revenue,” Prof Ndung’u said in an affidavit.
High Court Judge Mugure Thande stopped the Treasury from implementing the Act on June 30, after ruling that Kenyans might be subjected to unlawful taxes, in case the petitions challenging the Act are successful.
The judge on July 10 declined to lift the suspension and directed the file to be forwarded to Chief Justice Martha Koome for appointment of a bench to determine the petitions challenging the Act.
Justice Koome has already picked High Court judges David Majanja, Christine Meoli and Lawrence Mugambi to determine the cases.
Arguing before Justices Mohamed Warsame, Kathurima M’Inoti and Hellen Omondi, former Attorney General Githu Muigai, who is leading a team picked by Mr Muturi, submitted that the suspension will make the government incapable of meeting its financial commitments and discharging its executive authority.
Teachers are set to get their July salaries with an increment of 7% of their basic salaries. TSC closed yesterday after the Court issued its ruling.
The National Treasury released a total of sh. 9.1 billion to TSC to be used to implement the July payrise plan for over 350,000 teachers and secretariat staff on pnp payroll.
Announcing the salary increment of between 7% to 10% for teachers and civil servants, President William Ruto said this is to cushion public servants from the harsh economic times.
“I know there is a proposal by SRC for the increase of salaries of different cadres of both civil servants and other public servants. So our teachers, policemen, military space, and those working in government, we have agreed that from tomorrow your salaries will be adjusted between 7 and 10 percent,” Ruto said during the launch of the new e-citizen platform at KICC.