In Kenya, the recent proposals in the Finance Bill 2024 have led to widespread discontent and demonstrations among citizens who are already grappling with the high cost of living. The bill, which is currently under discussion in the Kenyan parliament, contains provisions for increased taxes on a wide range of goods and services, with the aim of enhancing government revenues.
Several of the suggested tax increases in the bill have caused public outcry, including a 16% VAT on bread, higher taxes on mobile money transfers, and a new annual 2.5% tax on cars. Additionally, the bill proposes the introduction of an eco-tax on products considered detrimental to the environment, such as packaging, plastics, and tyres, thereby leading to higher prices for essential items such as nappies, sanitary towels, computers, and mobile phones.
President William Ruto has justified these measures as necessary measures to reduce Kenya’s dependence on borrowing to finance its budget. Nevertheless, many Kenyans have expressed frustration over the relentless tax burden they have experienced in recent years. They have already faced tax increases on salaries, fuel, and other essential services, as well as the introduction of a 1.5% housing levy and a higher health insurance tax.
The public discontent has been evident through social media campaigns, online petitions, and street protests in cities such as Nairobi and Mombasa. The widespread outrage has compelled the government to reconsider some of its proposed taxes, including those on bread, motor vehicles, vegetable oil, transportation of sugar, and financial services. The eco-levy on locally manufactured products and certain other tax increases are also set to be eliminated.
Despite these concessions, many protesters, particularly from the younger generation, argue that the suggested amendments do not go far enough. They remain steadfast in their belief that the entire bill should be withdrawn, as they are tired of excessive taxation and the financial burden it places on their daily lives.
The Finance Bill has not only drawn criticism from the public but has also encountered opposition from civil society organisations and the private sector, which anticipate negative effects on various sectors of the economy. It is a matter that has sparked intense debate and is likely to continue to be a significant point of contention as it progresses through the legislative process.
As the debate unfolds in the coming days, it remains to be seen whether the government will address the concerns of the public and strive to strike a balance between fulfilling its financial needs and alleviating the burden on the citizens. The outcome will undoubtedly have far-reaching implications for the economy and the well-being of the Kenyan people.