Key Developments in Finance Bill 2024: Protests, Bill Withdrawal, and Next Steps

On Tuesday, Kenya witnessed some of its largest protests in recent memory, fueled by a potent mix of social media outrage and frustration after the Finance Bill 2024 was passed to its final phase.

The protests were triggered by a new tax plan introduced by the government, which aims to raise an additional 302 billion shillings ($2.3 billion) for the upcoming budget year starting July 1, 2024.

Dubbed #OccupyParliament and #RejectFinanceBill, the movement showcased the growing power of tech in mobilizing citizens and shaping national discourse.

The spark ignited on major social media platforms like X(Twitter), TikTok, Facebook and WhatsApp. Kenyans, particularly the young and tech-savvy Gen Z, used these platforms to dissect the bill, highlighting its potential to burden ordinary citizens with increased taxes.

Memes, infographics, and explainer videos went viral, effectively simplifying complex economic concepts for a broad audience.

The online fervor translated into real-world action. The hashtag #OccupyParliament trended throughout the day, with Kenyans sharing live updates, organizing logistics, and encouraging participation. This online organization proved crucial in coordinating protests across major cities like Nairobi, Mombasa, and Kisumu.

Beyond just communication, technology played a vital role in amplifying dissent.

Live streaming on platforms like Instagram, Tiktok and Facebook Live provided a window into the protests, garnering international attention and sparking solidarity messages from Kenyans abroad.

However, the digital landscape wasn’t without its pitfalls. Misinformation and fake news were also was witnessed.

The tax plan, which includes controversial levies such as a 16% tax on bread, was met with significant opposition.

Although some of the more controversial taxes were removed by lawmakers, protesters continued to demand the complete withdrawal of the plan, with the hashtag #RejectFinanceBill2024 at top trending.

The government introduced these new taxes to improve state finances, manage its high debt ratio, and secure more funding from the International Monetary Fund (IMF).

The protests escalated as demonstrators stormed the parliament building, vandalizing the premises. In response, military officers used excessive force, firing live bullets, which led to several deaths among the protesters.

In a televised address, President Ruto emphasized the government’s dedication to national security, stating, “The government shall treat every threat to national security and the integrity of our state as an existential danger to our republic.”

The president assured Kenyans of a thorough response to the protests, which he characterized as “treasonous events.”

After the presidents speech, Kenyans shared their anger online, calling for continued protest until the bill was completely withdrawn.

The impact of the protests:

On Wednesday, June 26th, a day after the deadly protests, president Ruto said he will not sign the Finance Bill 2024.

“Listening keenly to the people of Kenya who have said loudly that they want nothing to do with this Finance Bill 2024, I concede and therefore I will not sign the 2024 Finance Bill and it shall subsequently be withdrawn,” he said.

In a memo, notifying Parliament about his reservations about the proposed revenue-raising law, the president said:“I decline to assent to the Finance Bill 2024, and refer the Bill for reconsideration by the National Assembly with the recommendation for the deletion of all the clauses thereof.”

On Thursday, the nationwide protests were also witnessed and Kenyans continued to use online platforms to air their views.

The president deployed military forces to suppress nationwide anti-government protests that have led to many fatalities (23 reported) and numerous injuries.

On the same day, National Assembly Speaker Moses Wetangula referred President William Ruto’s Memorandum of Referral concerning the Finance Bill 2024/25 to Parliament’s Departmental Committee on Finance and Planning, officially initiating the process to withdraw the controversial bill as recommended by the President.

Since Parliament is in recess until July 23rd, there’s uncertainty about how lawmakers will handle withdrawing the bill.

The speaker however has clarified that the House will not be reconvened immediately to discuss President Ruto’s memorandum.

He further explained the basic procedures and implications of rejecting the Finance Bill 2024 on the fiscal year 2024/25.

Article 115 of the Kenyan Constitution deals with presidential assent and referral of bills passed by Parliament. Here’s a breakdown of the key points:

Presidential Action: Within 14 days of receiving a bill, the President has two options:

Assent to the Bill: This makes the bill law.

Refer the Bill Back: The President can return the bill to Parliament with any reservations they have about it.

Parliament’s Options: If the bill is referred back:

Amend the Bill: Parliament can address the President’s concerns and make changes to the bill.

Re-pass the Bill Unchanged: Parliament can choose to pass the bill again without any modifications.

Second Assent:

If Parliament amends the bill to address the President’s concerns, it’s sent back for their final approval.

In some cases, like bills requiring Senate approval, a specific majority vote in both houses is needed to override the President’s initial reservations.

Automatic Assent: If the President doesn’t take any action within 14 days, or if they fail to assent to a bill re-passed by the required majority, the bill automatically becomes law.

What next?

It is worth noting that the Budget outlines the government’s spending plans (Estimates of Expenditure). The Appropriation Bill authorizes spending this money (approved Estimates). But how will the government raise this money?

This is where the Finance Bill comes in. It proposes new taxes or changes existing ones to raise the revenue needed for the Budget. The National Assembly approves both the Appropriation Bill (spending) and the Finance Bill (raising money).

In this case, the President withdrew the Finance Bill and sent it back to Parliament. Parliament is on recess until July 23rd when the Departmental Committee on Finance and National Planning shall be required to report to the House on the President’s Memorandum.

The National Assembly is currently on recess but will consider the President’s message on July 23rd, 2024. Standing Order 42(3) of the National Assembly Standing Orders require the Speaker to deliver any presidential messages to members and report them to the House during the next session. This applies to the President’s memorandum related to the Finance Bill.

The Finance Bill cannot become law automatically during this time.

It is worth noting that there is a financing gap of approximately Ksh300 billion due to the rejected Finance Bill.

The new financial year starts on July 1st, 2024. The Appropriation Bill, already passed by the National Assembly, allows the government to withdraw money for its spending.

Although a Finance Bill (for tax changes) wasn’t passed, the government can address the resulting funding gap by reducing approved expenses. This can be done through a Supplementary Appropriation Bill following the proper procedures.

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