The nationwide protests in Kenya against the government’s plan to raise $2.7 billion in additional taxes have already resulted in one death and at least 200 injuries. Reports from Thursday’s demonstrations indicate that tensions are high as citizens voice their discontent with the proposed financial measures.
According to the Independent Policing Oversight Authority, a 29-year-old man succumbed to a thigh wound he sustained during the protests, allegedly due to police shooting. Many other demonstrators, including police officers, have suffered serious injuries. The man passed away during treatment at a hospital, though the circumstances of his injury remain unclear.
Why Are Kenyans Protesting?
Kenyan President William Ruto’s administration faces mounting protests over the contentious tax measures outlined in the Finance Bill 2024 for the 2024/2025 fiscal year. Despite a last-minute effort by the ruling coalition to make concessions, public anger persists, with calls for an overhaul of the bill.
The protests, led predominantly by Generation Z and human rights activists, began in Nairobi on June 18, coinciding with the bill’s presentation to parliament by National Assembly Finance Committee Chair Kuria Kimani. Demonstrators demand that the government abandon the finance bill, arguing it will exacerbate economic hardship and increase the cost of living for already struggling Kenyans.
While the International Monetary Fund (IMF) supports the government’s need to raise revenues to address the budget deficit and state borrowing, the public remains unconvinced.
Recent Developments in Kenya
In response to the protests, the government has made some concessions. President Ruto has endorsed recommendations to eliminate certain new levies, including those on car ownership, bread, cooking oil, and financial transactions. Despite these efforts, widespread demonstrations erupted in 19 of Kenya’s 47 counties.
On Thursday, lawmakers passed the finance bill in its second reading, advancing the controversial tax proposals. Parliament is set to meet on Tuesday to vote on proposed changes, with the budget committee warning that the bill, if enacted, would create a 200 billion Kenyan shilling ($1.56 billion) shortfall in the 2024/25 budget, necessitating spending cuts.
If approved, the bill will take effect before July 1, enabling the Kenya Revenue Authority (KRA) to start collecting taxes for the new fiscal year. The Kenya Kwanza administration aims to raise Ksh302 billion through measures such as changing the VAT status for ordinary bread from 0 percent to 16 percent, imposing a 2.5 percent motor vehicle tax, and introducing a Ksh150 per kilogram eco-levy on plastic packaging.
The bill also proposes a 16 percent VAT on financial services and a 25 percent excise duty on crude palm oil and finished cooking oil. Bankers argue these measures will increase banking costs for customers and hinder financial inclusion, particularly affecting low-income individuals and small businesses. The Kenya Association of Manufacturers (KAM) and the Association of Edible Oil Manufacturers warn that higher taxes could lead to business closures and job losses.
The Heart of the Protest
Kenyans, already burdened by heavy taxation under the Finance Act 2023, which included the controversial housing levy, are demanding a complete overhaul of the Finance Bill 2024. The protests, which began in Nairobi under the ‘Occupy Parliament’ banner, aim to pressure MPs to reject the proposed tax hikes. Mobilized primarily through social media, the demonstrations have spread across the country.
Despite the largely peaceful nature of the protests, police brutality remains a concern. The authorities, known for their harsh tactics in dispersing civil demonstrations, have resorted to firing live bullets at protestors.
Stay Informed
The situation in Kenya continues to evolve, with significant implications for the country’s future. At SatofSat, we are committed to providing you with the latest updates and in-depth analysis of this critical issue. Stay tuned for more developments.
