Why has Kenya’s finance bill triggered protests?

By Nita Bhalla

The Finance Bill 2024 – which proposes increased levies on a wide range of products and services – is being debated in the Kenyan parliament and lawmakers are expected to vote on it on Tuesday.

But the bill has faced widespread criticism from a public already overburdened by the high cost of living.

Campaigners, largely made up of Gen Z and millennials, say the government’s removal of some taxes does not go far enough and are demanding the entire bill be scrapped.

Here’s what you need to know about why the bill has stirred so much outrage in one of Africa’s most vibrant economies.

What is the finance bill?

The bill is part of Kenya’s 2024/25 budget and proposes tax hikes on various goods and services as a means to increase government revenues.

Provisions in the bill includes imposing 16% VAT on bread as well as tax hikes on mobile money transfers and a new annual 2.5% tax on cars.

The bill also proposes an eco-tax on products that are considered harmful to the environment – such as packaging, plastics and tyres – and would increase the cost of items including nappies, sanitary towels, computers and mobile phones.

Other taxes include 16% VAT on some financial services and foreign exchange transactions.

Income from the operation of digital marketplaces and digital content will also be taxed under the bill.

President William Ruto has said the measures, which would raise $2.7 billion in additional taxes, are aimed at reducing Kenya’s reliance on borrowing to fund its budget.

Why are Kenyans angry about it?

Already overburdened by the high cost of living, Kenyans have faced a torrent of tax hikes, including on salaries and fuel, since Ruto was elected in 2022.

The government has also introduced a 1.5% housing levy – to build affordable homes for the poor – on monthly income and a higher health insurance tax is due to come into effect in July.

Opponents say the bill is the final straw for many Kenyans.

In recent weeks, Kenyans have criticised the draft legislation online and organised nationwide protests under trending hashtags such as #RejectFinanceBill2024, #OccupyParliament and #TotalShutdownKenya on social media sites such as TikTok and X.

An online petition on Change.org has garnered more than 111,000 signatures since its launch on June 15.

Thousands of demonstrators have taken to the streets in coordinated marches across Kenya, including in Nairobi where riot police have used tear gas and water cannon to disperse protesters.

More protests are planned on Tuesday and in the coming days as part of what demonstrators are calling “7 Days Of Rage!” from June 21-27.

The bill has also faced attack from civil society organisations such as the Law Society of Kenya, as well as from private business owners, who say it could affect sectors such as retail, finance, the internet, transport and manufacturing.

How have the authorities responded?

Kenya’s security forces have been accused by rights groups of using excessive force against peaceful protesters.

One person was killed last Thursday and at least 200 people were injured, according to rights groups and the police watchdog.

Hundreds of protesters have also been arrested.

President Ruto on Sunday offered to hold talks with the young protesters.

“I am very proud of our young people. They have stepped forward tribeless and peacefully to engage in the affairs of their country,” said Ruto.

“They have done a democratic duty to stand and be recognised, and I want to assure them that we will engage in conversations to identify and address their issues.”

The widespread outrage has also forced the government to backpedal and propose dropping some of its planned taxes.

These include the proposed levies on bread, motor vehicles, vegetable oil, transportation of sugar, and financial services.

The proposed eco-levy on locally manufactured products -including sanitary towels, diapers, phones, computers, tyres and motorcycles – will also be scrapped.

In addition, there will be no tax increases on mobile money transfer fees and internet data charges.

Why do protesters say concessions do not go far enough?

Ruto’s offer to talk to the protesters and the concessions on taxes have done little to douse the outrage among the demonstrators who say they are fed up with over-taxation.

Campaigners say while some proposed taxes have now gone, other hikes, such as for road maintenance and imported goods, remain in place. They want the entire bill to be scrapped.

“We cannot afford it, we do not want to hear anything about it, we want the bill to be completely taken off the table,” Wanjira Wanjiru, a social activist, told Citizen TV last week.

(Reporting by Nita Bhalla @nitabhalla; Editing by Clar Ni Chonghaile.)