Kenya protests persist despite partial withdrawal of bill to raise taxes

Despite dropping some proposals, Kenya's Finance Bill 2024 still includes higher import taxes, fueling ongoing protests. (Image: Reuters)

Protests have broken out in Kenya against a contentious finance bill, leading to tragic incidents and widespread public backlash. The bill aims to raise taxes to tackle the country's high debt levels.

President Ruto's decision to withdraw the bill is a notable turnaround and a win for protesters who have been calling for broader political changes.

Origins of the protests

The Finance Bill 2024, initially proposed by the Kenyan government, sought to increase taxes on several essential items and services. This included a 16 percent value added tax (VAT) on bread and higher taxes on mobile money transfers, crucial to Kenya's digital economy, according to the Indian Express. 

It also included higher taxes on financial transactions and a new annual vehicle ownership tax. These measures aimed to raise $2.7 billion amid Kenya’s heavy debt burden.

Additionally, a new annual tax on vehicle ownership and levies on environmentally harmful products like plastics and diapers were introduced.

Kenya faces a significant economic challenge with its public debt reaching 68 percent of its gross domestic product (GDP). This exceeds the recommended limit of 55 percent advised by the World Bank and the International Monetary Fund (IMF). The country's annual revenue is heavily strained as 37 percent of it is used solely for interest payments on this debt. To stabilise its economy, the IMF has advised Kenya to reduce its deficit and expand its tax base. This would pave the way for potential financial assistance in the future.

Public outcry and protest

The bill faced immediate resistance from Kenyans, who argued that these taxes would burden ordinary citizens already struggling with high living costs. Activists and citizens organized protests under the banner '7 Days of Rage', demanding the complete withdrawal of the bill. Social media campaigns like #RejectFinanceBill2024 gained traction, reflecting widespread discontent.

Escalation and government response

As tensions escalated, protesters stormed the parliament building in Nairobi, setting parts of it ablaze. In response, security forces used tear gas, water cannons, and even live ammunition, resulting in multiple deaths and injuries. International observers and human rights groups condemned the use of force against demonstrators.

Government retreat and concessions

Facing mounting pressure, President William Ruto announced a surprising decision not to sign the bill into law. He acknowledged the public outcry and pledged to engage in dialogue with various stakeholders to address concerns. This move marked a significant retreat for the government, indicating the strength of public opinion against the proposed tax increases.

Impact and future outlook

The events underscored deeper frustrations with the government's economic policies and its responsiveness to public needs. Despite the bill's withdrawal, many Kenyans continue to demand broader political reforms and improved governance. The aftermath of the protests has sparked a national debate on fiscal policy, citizen engagement, and the role of leadership in Kenya's development.