Kenya Scraps Most New Tax Hikes As Hundreds Protest

Kenya scraps most new tax hikes as hundreds protest

Nairobi, (APP - UrduPoint / Pakistan Point News - 18th Jun, 2024) Kenya's government on Tuesday walked back plans to impose multiple tax hikes, the presidency said, amending a controversial bill that sparked protests where more than a dozen demonstrators were arrested.

The East African economic powerhouse has struggled with a cost-of-living crisis, which critics warned would only worsen under the levies laid out in a bill due to be debated this week and passed before June 30.

Hundreds of mostly young protesters assembled near parliament on Tuesday, with police firing tear gas and making arrests, according to AFP journalists.

Hours later, the presidency announced that it would scrap many of the bill's most contentious provisions, including taxes on bread purchases and car ownership.

"The Finance Bill has been amended to remove the proposed 16 per cent VAT on bread, transportation of sugar, financial services, foreign exchange transactions as well as the 2.

5 per cent Motor Vehicle Tax," the presidency said in a statement.

"Additionally, there will be no increase in mobile money transfer fees, and Excise Duty on vegetable oil has also been removed," it added.

The cash-strapped government had earlier defended the hikes -- which were projected to raise some 346.7 billion shillings ($2.7 billion), equivalent to 1.9 percent of GDP -- as a necessary measure to cut reliance on external borrowing.

Lawmakers were due to debate the bill on Tuesday afternoon, but postponed the discussion to Wednesday, just before the presidency announced the changes following recommendations made by a parliamentary committee.

"Because the people's representatives have listened to the people... they have adjusted the proposals," President William Ruto told lawmakers.