On Tuesday, Kenya’s parliament passed the 2024 Finance Bill despite opposition from thousands of Kenyans. A total of 195 MPs voted in favour of the bill, 104 voted against, and there were 3 void votes. The bill was criticised for introducing a raft of new tax proposals, the second in two years, despite an increase in the country’s cost of living. OccupyParliament protesters on the streets of Nairobi asked lawmakers to reject the proposals. More people used social media platforms, X and TikTok, to oppose the bill.
The Finance Bill will now be sent to William Ruto for presidential assent. Ruto’s administration insists the new taxes will help with debt repayment and economic stability. However, protesters, opposition parties, and civil society groups asked the government to cut the budget in non-key areas to reduce the tax burden.
Rather than reduce expenditures, lawmakers introduced amendments to compensate for the scrapped taxes. The fuel levy has been increased by 39% to KES25. Currently, taxes account for 40% of a litre of petrol.
Other amendments include an increase in the import declaration levy from 1.5% to 2.5% of all imports, including raw materials. The lawmakers have also increased the railway development levy from 1.5% to 2.5% of import value.
“All the three amendments have a significant impact on the cost of living and the competitiveness of our products (goods manufactured in Kenya,” said Billow Kerrow, an ex-member of parliament and economist.
The passage of the bill will escalate the mass protests that have crippled business in major cities and towns, including the capital Nairobi, the port city of Mombasa, and Kisumu, a city in western Kenya.
While Ruto’s administration scrapped some tax proposals to appease the public, they came too little, too late. The removed proposals include a 16% VAT on bread, motor vehicle tax, and additional levies on cooking oil. Despite this, many Kenyans say the new taxes will exacerbate a cost of living crisis.
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