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Kenya Finance Bill 2024: Bread and other tax proposals rejected amid public outcry
Image caption, Protesters angered by the new finance bill are trying to reach parliamentArticle information
- Author, Basillioh Rukanga
- Paper, BBC News, Nairobi
- June 18, 2024, 2:01 pm BST
Updated 18 minutes ago
The Kenyan government has repealed some taxes proposed in this year’s controversial finance law, including a 16% tax on bread, following public outcry.
The MPs’ announcement came as police fired tear gas and water cannons to try to disperse angry protesters in the capital, Nairobi.
Dozens of people were arrested and lawyers earlier joined crowds at the city’s main police station to demand the release of those detained.
Since taking office in 2022, President William Ruto has introduced several new and unpopular taxes aimed at wiping out the country’s national debt of almost $80 billion (£63 billion).
But critics of the latest proposals fear they will stifle economic growth and lead to job losses.
Some of the protesters marching through the capital called for the president’s resignation, shouting: “Ruto must go! Ruto must go!”
The U-turn regarding the new financial law was announced by Kuria Kimani, chairman of the parliamentary finance committee, at a press conference attended by President Ruto, as well as other legislators from the coalition government.
His finance team has been collecting public views on the bill and he said the decision to abandon some of the proposals was taken to protect Kenyans from the rising cost of living.
Other proposed taxes that were eliminated include taxes on cooking oil, mobile money services and motor vehicles, which critics said would also have hit the insurance industry.
Kimani also announced the reversal of a proposed eco-tax that targeted products deemed to have a negative impact on the environment, such as packaging, plastics and tires.
The country faced a backlash, with many arguing that it would increase the cost of essential goods such as diapers, sanitary pads, computers and cell phones.
The tax would now only apply to imported products, Kimani said.
Ruto did not speak or react during the briefing – but the move, which was seen as succumbing to public pressure, will be a blow to his government.
He recently urged Kenyans to accept more taxes, arguing that they were in fact undertaxed, but acknowledged that it would be difficult.
In the last two years, taxes on wages, fuel and gross sales have been increased.
A housing tax of 1.5% of a worker’s monthly salary was also introduced, which goes towards the construction of affordable homes.
A new higher health insurance rate is also expected to take effect soon.
Lawmakers are expected to discuss the financial law on Wednesday, which is why protests are being held in the capital.
Police arrested several people accused of organizing the demonstrations.
Human rights groups condemned the police response.
“I am very angry and I am fighting for my future,” one protester, called Wangari, told AFP news agency on Tuesday.
“I’m still a young adult and I want to grow up in this country. And with so many taxes, with so much exploitation, I don’t see how we can build a life.”
Image caption, Dozens of protesters were arrested and placed in police vans Image caption, Tear gas was fired on the streets of central Nairobi
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Image source, Getty Images/BBC