Kenya Finance Bill 2024: Bread and other tax proposals scrapped amid public outcry

The Kenyan government has scrapped some taxes proposed in this year’s controversial finance bill, including a 16% tax on bread, after public outcry.

The MPs’ announcement came as police fired tear gas and used water cannons in an attempt to disperse angry demonstrators in the capital, Nairobi.

Dozens of people were arrested, and lawyers earlier joined the crowds chanting at the city’s main police station to demand the release of detainees.

Since taking office in 2022, President William Ruto has imposed several unpopular new taxes aimed at eliminating the country’s national debt of around $80bn (£63bn).

But critics of the latest proposals fear they will stifle economic growth and lead to job losses.

Some of the demonstrators who marched in the capital called on the president to resign, chanting, “Ruto must go! Ruto must go!”

Kuria Kimani, Chairman of the Parliamentary Finance Committee, announced the reversal of the new finance bill at a press conference attended by President Ruto as well as other lawmakers in the ruling coalition.

His finance team is collecting public views on the bill, and he said the decision to drop some of the proposals was taken to protect Kenyans from rising costs of living.

Other proposed taxes that were scrapped include taxes on cooking oil, mobile money services and cars, which critics said would also hurt the insurance industry.

Kimani also announced a rollback of a proposed environmental tax that targeted products seen as having a negative impact on the environment, such as packaging, plastics and tyres.

It faced a backlash, with many saying it would raise the cost of basic goods such as diapers, sanitary towels, computers and cell phones.

Kimani said the tax would now only apply to imported goods.

Ruto did not speak or react during the press conference, but the move, seen as a surrender to public pressure, would be a blow to his government.

Recently, he urged Kenyans to accept more taxes, claiming that the taxes imposed on them were in fact too little, but he acknowledged that it would be difficult.

Over the past two years, taxes on salaries, fuel and gross sales have been raised.

A housing tax of 1.5% of a worker’s monthly salary has also been imposed, which goes towards building affordable homes.

A new higher health insurance tax is also scheduled to take effect soon.

Lawmakers are scheduled to discuss the finance bill on Wednesday, which is why protests are being organized in the capital.

The police arrested a number of people accused of organizing the demonstrations.

Rights groups condemned the police response.

“I am very angry and I am fighting for my future,” one protester, Wangari, told AFP news agency on Tuesday.

“I’m still a young adult and I want to build myself in this country. With such taxes, with such exploitation, I don’t see how we can build a life.”