Court rules in favour of judges in taxable car allowance case

The SRC had moved to court, arguing that the court overstepped its judicial boundaries by intervening in matters of salary determination, which is the commission's exclusive mandate, and the downward salary review should be reinstated.

This, after SRC, in 2021, moved to court, noting that on July 7, 2011, the Head of Public Service issued a circular which awarded a taxable car allowance of up to a maximum of Ksh.2 Million, for the purchase of motor vehicles, to Judges alongside Permanent Secretaries/Accounting Officers, Clerk to the National Assembly and Provincial Commissioners.

The amount was increased to Ksh.5 million in 2015 and later moved to the current Ksh.10 million in 2018.

According to the SRC, the benefit has adversely impacted the affordability and fiscal sustainability of the public wage bill, resulting in inequity, disparity in benefits to state officers and, therefore, had to be revoked.

It maintained that the benefit amounted to double compensation in view of the fact that Judges have official transport vehicles purchased and maintained by the government, or in form of motor vehicle reimbursements, car maintenance allowance and mileage reimbursement; or commuter/transport allowance for those without official transport.

The SRC has also set a car loan benefit at an interest of 3% per annum for all State officers, including Judges.

The court ruled that, having considered the matters raised in the case, the appeal is unmerited. 

"It is dismissed in its entirety. Being a matter touching on the public interest, we make no order as to the costs," read the ruling in part.

"In our view, the complaint by the SRC does not amount to much in substance."

The court further held that SRC has no discretion on the payment of accrued salaries and benefits. 

It said that the Commission has discretion to review the said salaries and benefits upwards,  but it does not encompass deciding whether or not the same ought to be paid. 

"The obligation to pay arises once the salaries are determined and the benefits accrue," the court noted.

"The posture taken by the SRC that the decision poses substantial risks to Kenya’s fiscal sustainability and governance integrity rings hollow."