Short of cash, the government wants to raise around 346.7 billion shillings ($2.7 billion), or 1.9% of GDP.
Dozens of Kenyans gathered outside Parliament on Tuesday to protest the controversial tax hike. Police used tear gas and arrested at least three people, according to AFP journalists present on the scene.
East Africa’s economic powerhouse faces an acute cost of living crisis, which critics say will worsen with the proposed levies.
The cash-strapped government defended the move to raise about 346.7 billion shillings ($2.7 billion), or 1.9 percent of GDP, as a necessary measure to reduce reliance on external borrowing. .
Dubbed “Occupy Parliament”, the protest was announced online after an activist leaked MPs’ contact details, calling on people to flood them with calls and messages to defeat a bill proposing further increases.
Among the bill’s most controversial provisions are a 2.5% tax on motor vehicles and the reintroduction of VAT on bread.
Analysts say although taxes could slow consumption and hurt the economy, the bill is expected to pass thanks to the large parliamentary majority of President William Ruto’s party.
Amid growing discontent, Ruto called a meeting to urge his MPs to support the bill ahead of the parliamentary debate which begins on Tuesday afternoon.
Parliament must adopt the final version of the bill before June 30.
Ruto came to power in 2022 promising to revive the economy and improve the situation of the most disadvantaged, but his policies have sparked widespread discontent.
He increased income tax, health insurance contributions, and doubled VAT on petroleum products to 16%.
Last year’s tax hikes led to opposition protests, sometimes marked by deadly clashes between police and demonstrators.
Although Kenya is one of East Africa’s fastest growing economies, around a third of the 51.5 million people live in poverty.
Headline inflation remained high at 5.1% in May, while food and fuel inflation were 6.2% and 7.8%, respectively, according to central bank data.
ABS with AFP
