Kenya govt plans to reinstate some taxes to raise $1.2 bn

The Kenyan government plans to raise about $1.2 billion by reinstating some unpopular taxes contained in a finance bill that was scrapped in the face of deadly street protests, a government minister said.

President William Ruto had warned of a funding shortfall after he decided in June to drop the controversial tax hikes after a bloody day in Nairobi that saw the storming of parliament and police firing live bullets on demonstrators.

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Finance Minister John Mbadi told private station Citizen TV on Sunday that the government was considering about 49 tax measures to try to raise roughly 150 billion shillings ($1.2 billion).

These include the reintroduction of an “eco levy” on goods such as electronic items as well as plastic packaging, that the government says is aimed at reducing waste.

“If you are injurious to the environment then you must pay for helping make good the harm you have caused,” Mbadi said.

Mbadi is one of four opposition stalwarts who joined a revamped cabinet after Ruto vowed to create a “broad-based” government to try to address the concerns of the protesters, led largely by young Gen-Z Kenyans.

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After scrapping the 2024 finance bill, which would have raised about $2.7 billion in taxes, Ruto announced government spending cuts and increased borrowing to plug the gap.

Citizen TV said the new measures contained in the tax amendment bill were expected to be in place by the end of September.

The abolition of the 2024 finance bill saw global ratings agencies Moody’s and Fitch downgrade Kenya’s credit rating over concerns about the government’s ability to service its $78 billion public debt.

© Agence France-Presse