NAIROBI - The High Court of Kenya on Monday dismissed a government bid to unfreeze tax increases that have sparked widespread protests, asking senior judges to direct the case on the hikes that authorities say are needed to cut debt and create jobs.
At least two people were killed on Friday during the protests, human rights groups said, as tensions flared over the tax hikes that were introduced at a time when many people were already struggling with high living costs.
Justice Mugure Thande declined to grant the government's request to lift the orders, saying the petitioners who sued the government had raised weighty issues that should be determined by a full hearing.
Lawyers for the government immediately sought leave to seek the removal of the order at the Court of Appeals.
Thande said the case would now be referred to the chief justice to form a panel of judges to hear the matter.
The High Court blocked the hikes on June 30 but the government still raised retail prices of petrol, causing one of the petitioners to open a contempt application against the head of the state energy regulator.
The contempt application is still pending.
The tax hikes, expected to raise an extra 200 billion shillings ($1.42 billion) a year, are needed to help deal with growing debt repayments and to fund job-creation initiatives in East Africa's largest economy, the government says.
Apart from doubling the fuel tax to 16%, the law that was signed last month introduces a 1.5% housing levy for all employees and raises the top personal income tax rate to 35%.
Opposition leader Raila Odinga has called for more protests on Wednesday against the tax hikes and other grievances.
($1 = 140.9500 Kenyan shillings)
(Reporting by Duncan Miriri and Humphrey Malalo; Editing by Devika Syamnath)