Kenya’s Government is Proposing Another Tax Bill, Drawing Further Criticism

Some have taken to slamming the new treasury cabinet secretary (CS), John Mbadi, an opposition politician who recently took up his position after Ruto instituted a new cabinet largely comprising members of the previously dissolved cabinet – for trying to push a new bill so soon after the recent protests.

“CS Mbadi How can you, as a former opposition MP (member of Parliament), support the very policies we fought against?” @cpaul69342702 asked. Meanwhile, @McKennaMK shared a video of Mbadi from June, where he likened the ruling Kenya Kwanza coalition to “pickpockets,” while urging the general public to reject the proposed finance bill at the time.

In an interview with Citizen TV this past weekend, Mbadi said the government is looking to collect more taxes by implementing several reforms to the revenue process. Amongst those reforms are “sealing all loopholes through automation of systems” at the Kenya Revenue Authority, extending the tax amnesty period to give more people time to file their tax returns, and tracking fictitious tax refunds.

While Mbadi stated that the amendment bill removes formerly proposed levies on sanitary pads and other “sensitive items,” as well as making bread a tax-exempt commodity, the news of a new tax bill hasn’t been well-received by many Kenyans, who’ve been online venting their annoyance at the government for attempting to impose a fresh set of taxes barely weeks after the last set of protests.

The widely panned, proposed finance bill was only withdrawn after demonstrating civilians were met with deadly force by the Kenyan police and security forces, which led to the deaths of dozens and injuries to many others. However, more protests ensued, with citizens demanding better accountability and transparency from Ruto and government officials, who have been criticized for living lavishly and paying themselves huge salaries from the country’s coffers.

Without the framework of the withdrawn bill for the 2024-2025 fiscal year, the Kenyan government is currently relying on the finance bill from 2023, which doubled the value-added tax on fuel, raised the top personal income tax rate and introduced a housing tax.

However, the constitutionality of the 2023 finance bill is being challenged in the courts. Yesterday, the Supreme Court of Kenya issued a stay order temporarily suspending the Court of Appeal’s ruling that declared the bill unconstitutional. The government immediately appealed that late July decision and the Supreme Court’s order precedes the hearing scheduled for September 10 and 11.

The top court said it was in the public’s interest to maintain budget stability, allowing the Kenyan government to keep collecting the additional taxes laid out in the 2023 finance bill. The order has been railed against, with X user @niqlaw writing that, “Staying a nullified and unprocedural law is akin to undermining the rule of law together with the national values and principles of governance envisioned under Art.10, Constitution of Kenya, 2010.”

With the outcome of the September appeal hearing uncertain, the government is looking to get the tax amendment bill through Parliament by September 30, the deadline for a new bill tied to the fiscal year. However, the relentlessness seems tone-deaf, especially as the dust on the last rounds of protest has yet to settle. “The government is hellbent on passing this tax bill because the president has an aim to increase Kenyan taxes in the next couple of years to at least 20 percent of GDP by the end of his first term in 2027,” Nairobi-based culture journalist Frank Njugi explains. “As it stands the tax-to-GDP ratio is at 14 percent.”

For many Kenyans, it’s not the target or the administration’s goal of reducing public and external debt that’s the primary problem, it’s the lack of accountability and wanton corruption by government officials. “The taxes already imposed on Kenyans at that 14 percent ratio are not being accounted for and instead the collected money is being misappropriated by the regime,” Njugi says. “We tend to see politicians waste these funds living in exuberance and creations of unlawful offices on occasion, which makes Kenyans question if the raising of the taxes is really to benefit the nation or those individuals in power.”

That the new proposed bill includes some of the taxes from the bill that were protested against, like the eco-levy, is a widespread point of concern for many who believe that the government isn’t addressing the concerns of accountability, as well as the high cost of living situation.

“This Eco levy is a mistake,” Kathiani MP Robert Mbui said in an interview on Citizen TV. “Everybody who's running their business and has a little technology will have to pay something extra. Something he was told by his predecessor (former treasury CS Njuguna Ndung’u), is to be very careful. Kenya has a problem on cost of living and poverty. He was told ‘when you increase taxes, it doesn't necessarily mean you will raise more.’”