Kenya’s finance ministry is working to reintroduce some of the tax measures from the Finance Bill 2024, which were previously withdrawn after deadly protests that resulted in over 60 deaths and the dismissal of President William Ruto’s entire cabinet. The initial bill aimed to raise 344 billion shillings ($2.7 billion) in additional revenue but faced significant opposition.
Key Points:
- Public Reaction: The original tax measures, which included increased levies on essentials like bread and diapers, were scrapped amid intense protests.
- Government Response: New Treasury head John Mbadi plans to revise and reintroduce these measures through alternative proposals, emphasizing thorough public consultation to address past criticisms.
- Legal Challenges: The bill was challenged in court and deemed unconstitutional, leading to its withdrawal.
- Fiscal Pressures: With Kenya’s debt at a high risk of distress and a widening fiscal deficit, the government seeks to enhance tax collection and manage its budget more effectively.
- Proposed Changes: Potential measures include extending a tax amnesty, addressing VAT refund issues, and modifying the tax status of critical commodities to balance revenue needs and public impact.
