President William Ruto last month signed into law a finance bill expected to generate more than $2.1 billion for the government's depleted coffers, but the taxes threaten to pile more pressure on a population already struggling with high inflation.
The Nairobi high court had suspended implementation of the legislation after a senator filed a case challenging its constitutional legality.
But on Friday, the court of appeal lifted the suspension, pending a final decision on the case.
"The order prohibiting the implementation of the Finance Act 2023... is hereby lifted pending the hearing and determination of the appeal," a three-judge bench ruled.
The bill spurred months of anti-government protests by opposition leader Raila Odinga, in part over a cost-of-living crisis, with the demonstrations spiraling into looting and deadly clashes with police.
The unrest has sparked alarm among Kenyans and the international community, which has urged the two sides to negotiate a political solution.
The Finance Act provides for new taxes or increases on basic goods such as fuel and food and mobile money transfers, as well as a controversial levy on all tax-payers to fund a housing scheme.
The government says the taxes will help create jobs and reduce public borrowing.
Ignoring the earlier suspension orders, Kenya's energy regulator last month announced a hike in pump prices after the doubling of VAT to 16% as stipulated in the law.
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