Kenyan President William Ruto’s administration is facing increasing countrywide protests over the contentious taxation measures for the 2024/2025 fiscal year, even as a last-minute attempt by the ruling coalition to make a few concessions failed to calm an agitated public demanding an overhaul of the Finance Bill 2024.
Anti-Finance Bill protests, largely led by Generation Z (Gen Z) and human rights activists, started in Nairobi on June 18, the day the controversial document was tabled in parliament for debate by the National Assembly Finance Committee Chair Kuria Kimani.
By Thursday, the protests had spread countrywide, with marches witnessed in at least 18 counties. The protests spread to Mombasa and spiralled to other parts, paralysing business activities in several other towns in East Africa’s largest economy.
Police officers arrest a protestor at the Kenya National Archives in Nairobi, Kenya on June 18, 2024 for taking part in the Occupy Parliament Protests against the 2024 Finance Bill. PHOTO | FILE | NMG
One protester was shot dead on Thursday, another one died on Friday and at least 200 others, including observers and journalists, were injured in the largely peaceful demonstrations.
If passed, the Bill, which has been rejected by the opposition MPs, is expected to be enacted before July 1, to allow Kenya Revenue Authority (KRA) to start collecting taxes for the 2024/2025 fiscal year.
The Kenya Kwanza administration is seeking to raise Ksh302 billion from the fiscal measures, which initially included an increase in the cost of bread by changing the VAT status for the supply of ordinary bread from 0 percent to 16 percent, a motor vehicle tax at a rate of 2.5 percent of the value of the vehicle and a Ksh150 per kilogramme eco-levy on plastic packaging to curb the surge in waste production that poses a considerable risk to both the environment and human health.
The Bill also proposes to introduce 16 percent VAT on financial services and to impose excise duty of 25 percent on crude palm oil and finished cooking.
Bankers say the proposal would increase cost of banking to customers and hamper financial inclusion efforts, particularly affecting low-income individuals and small businesses.
The Kenya Association of Manufacturers (KAM) and the Association of Edible Oil Manufacturers say higher taxes risk closure of businesses and loss of jobs.
A police officer aims a gun loaded with a tear gas canister towards demonstrators along Kenyatta Avenue in Nairobi, Kenya on June 20,2024 during protests against the proposed Finance Bill 2024. PHOTO | FILE | NMG
But, in a sudden U-turn over some of the tax proposals after consultation with President Ruto, the Finance Committee Chair Mr Kimani on Tuesday dropped proposals on charging 16 percent VAT on bread and financial services and abolished the proposed motor vehicle tax proposal of 2.5 percent tax.
He also reviewed the eco levy proposal and restricted the tax to imported finished goods and retained excise duty on mobile money services by cellular phone providers at 15 percent.
But, after dropping the motor vehicle tax, the government is seeking to raise road maintenance levy in the fuel pricing formula by Ksh9 ($0.07) per litre, which will effectively increase the RML from Ksh18 ($0.14) to Ksh27($0.21) and increase the fuel retail price.
Kenyans still reeling from the heavy taxation under the Finance Act 2023, which introduced the controversial housing levy, want the entire Finance Bill 2024 overhauled.
National Treasury Cabinet Secretary Njuguna Ndung’u presented a Ksh3.99 trillion ($31.17 billion) spending plan for the 2024/2025 fiscal year, with hopes of funding the budget through tax revenues amounting to Ksh2.91 trillion ($22.73 billion).
About Ksh426 billion ($3.32 billion) of the projected revenues is to be derived from levies and fees charged by government ministries, departments and agencies for services rendered, leaving a budget deficit of Ksh597 billion ($4.65 billion) to be funded through net external borrowing of Ksh333.8 billion ($2.6 billion) and net domestic borrowing of Ksh263.2 billion ($2.05 billion).
Kenya’s public debt amounted to Ksh10.54 trillion ($82.34 billion) as of April 2024, comprising external debt of Ksh5.2 trillion ($40.62 billion) and domestic debt of Ksh5.3 trillion ($41.4 billion), with interest payments estimated at more than Ksh1 trillion ($7.81 billion) in the 2024/2025 fiscal year.
The debt declined by Ksh598 billion ($4.67 billion) from Ksh11.4 trillion ($89.06 billion) due to the appreciation of the Kenya shilling against the dollar and the euro, which together account up to 88 percent of the denomination of the debt stock.
It is against this background that an overtaxed public is protesting the new measures, amid a visible wastage by public officials and some unexplained votes running into millions of dollars.
The response of the government officials has also angered the youth especially, and the next days promise confrontations with the law.
Since his appointment in 2022 as President William Ruto’s chief economic adviser, David Ndii has sought to create a hawkish persona on social media, willing to engage in virtual brawls with critics of the administration’s policies.
And the Oxford-educated economist, who played a key role in crafting the President’s Bottom-Up Economic Transformation Agenda, is hardly every shy to hurl some choice words in the direction of those who rub him the wrong way on X (formerly Twitter).
When, for example, a wave of dissent recently broke on social media over a new round unpopular taxes in the Finance Bill, Ndii came out fighting.
“Politics is a contact sport. Digital activism is just wa***ng. Any jack*** can kick down a barn but it takes a good carpenter to build one,” he said in a post on June 14, appearing to mock the government critics on social media, most of them youth in their 20s and 30s, as harmless and clueless.
The economist’s reaction to the digital expression of dissent reflects the general attitude among Kenya’s political elite towards the Gen Z youth, whom they presume have little interest in politics and governance issues.
Youths protesting along Tom Mboya Street at the National Archives in Nairobi, Kenya confront police officers during day 3 of the Occupy Parliament Protest on June 20, 2024. PHOTO | FILE | NMG
But, after taking the front line in this week’s street protests, the Gen Zs might have finally emerged as a political force to be reckoned with.
The protests, which began in Nairobi on Tuesday under the ‘Occupy Parliament banner’ to try to push MPs to reject tax hikes in the Bill and mainly mobilised on social media platforms, spread out.
The mostly young protesters were largely peaceful, although the police, who have a reputation for brutality in breaking up civil protests, still found a reason to fire live bullets at them.
A 29-year-old protester identified as Rex Kanyike was shot dead in Nairobi.
Amnesty International and Kenya Medical Association said in a statement that at least 200 people suffered injuries during the protests on Thursday.
A number of social media posts on Friday sought to rally the youth to resume protests next week, when Members of Parliament are expected to cast the final vote for or against the Finance Bill.
Voting patterns in the earlier stages of debate suggest the proposed law will pass, with President Ruto’s Kenya Kwanza coalition enjoying a majority in Parliament.
But, in the coming days the President, who was already having trouble putting out political fires in his United Democratic Alliance lit by his now renegade deputy Rigathi Gachagua, will have a new and unconventional problem to solve – a mass revolt by restless youth fuelled by the power of social media.
Widespread voter apathy among the youth in the country’s recent elections has largely fuelled the narrative that they are apolitical
The country saw a decline in the number of young people – those aged between 18 and 35 – who registered to vote in the August 22 elections decline, with the electoral commission adding just 2.5 million voters to the register against a target of six million.
Prof XN Iraki, a University of Nairobi lecturer who has researched voting patterns in Kenya, in an article in The Conversation, blamed the low political participation among the youth on voting not being attuned to their habits, lack of faith in voting changing their fortunes, underrepresentation in politics, same faces on the ballot, and the perception that their votes don’t count.
Going by the sentiment expressed in the wave of Gen Z protests across the country this week, that might change in the next elections.