The controversial tax bill sought to increase taxes and VAT on essential goods like bread, cooking oil, diapers, and sanitary pads in order to raise money to pay off mounting debts.
On Tuesday, June 25th, Youth-led protests erupted in Nairobi and 37 other places across the country as lawmakers voted to pass a controversial bill that sought to raise taxes in a bid to raise revenue to pay off the country’s numerous debts.
Similar low-intensity organizing efforts were witnessed last year but this year the protests were more intense and managed to breach key government installations like Parliament and City Hall, the seat of power of the governor of Nairobi.
The tax hikes come at a time when the standards of living are falling off the cliff and high unemployment rates continue to plague a huge number of youths. Wasteful spending and opulence among the political class were also one of the main points of contention. High cost of living also continues to ravage a significant number of people.
Why this particular Finance Bill?
The key objective of the proposed finance bill was to increase and impose taxes and fees on a number of commonplace goods and services, such as diapers, fuel, internet data, and bank transactions. Resentment over the tone-deaf proposals increased and galvanized people to hit the streets to get their plight heard, several policies were dropped in the initial concessions but protesters insisted that they wanted the whole bill rejected, not amended. The measures are a part of the Kenyan government’s drive to increase domestic revenue by an additional $2.7 billion this year. The drive is driven by the IMF which has set stringent actions in order to give more loans to Kenya.
According to the administration, the adjustments are required to maintain government operations, lower the budget deficit, and pay interest on the national debt. Since it’s already difficult to make ends meet due to the high cost of living, protestors view them as punitive and forced. They accused the political class of being indifferent to their suffering while they themselves swim in money. Some senior officials had been earlier called out for what many believed to be plundering of public coffers due to their opulent lifestyles as exhibited on their social media platforms.
Kenya’s public debt is currently 68% of GDP, which is more than the IMF and World Bank’s suggested level of 55% of GDP. Kenya, which is struggling with severe liquidity issues and is unsure of its capacity to secure finance from financial markets, has turned to the IMF, which has advised the government to hit revenue objectives in order to get more assistance.
The planned tax increases, according to protesters, will stifle the economy and drive up living expenses for Kenyans who are already having a hard time making ends meet. They want the government to rescind the plans. The bill was used last year to impose a house tax by President William Ruto’s administration, which was elected in 2022 on a platform of improving the lives of the impoverished.
What was proposed in the Bill?
The bill had planned taxes that Kenyans claimed would exacerbate the country’s cost-of-living crisis were those on bread, cooking oil, mobile money services, specialized hospitals, and automobiles tax pegged at 2.5% of the value of a car to be paid annually.
An “eco levy” on most manufactured goods including sanitary towels and diapers is also on the cards. The eco levy was proposed on both locally and imported manufactured goods.
The bill also sought to increase the period of time the Kenya Revenue Authority (tax authority) has to make decisions from sixty to ninety days, Introduce a minimum top-up tax of 15% for residents or entities with a permanent establishment in Kenya that are a part of a multinational group with a consolidated annual turnover of €750 million in at least two of the previous four years, and raise the value-added tax (VAT) registration threshold for taxpayers making taxable supplies from KES 5 million to KES 8 million.
These measures were deeply unpopular as protesters and citizens argued that they would increase the cost of items even further with no respite from the government.
The protests as they happened.
The protests which began as an organic movement on the X platform via the hashtag “RejectFinanceBill2024” first started with people leaking the personal numbers of their MPs and other leaders and then texting, calling, and WhatsApp-ing them to ask them to reject the planned Bill. As opposed to protests led and funded by politicians, “occupy parliament” demonstrations were organized and mobilized using social media.
The move failed as the bill passed the first and second reading. On Tuesday, the third and final reading was supposed to take place in which the MPs would vote on the Bill and then forward it to the President for assent. The Bill was voted for smoothly in a record 30 minutes since opposition MPs had refused to attend the sitting protesting what they termed as “punitive measures” to raise taxes. It is when hell broke loose.
Demonstrators stormed the parliament, looting the interior and setting fire to portions of the building. The ceremonial mace—a representation of the legislature’s power—was also taken. Police and law enforcement officers responded with teargas and water cannons and when that was exhausted, they turned to live bullets.
This led to several people being killed and hundreds more injured. Official estimates place the toll on 13 individuals while verified reports from lawyers and other people on the ground count up to 25 individuals who lost their lives in the aftermath of the violent conduct by the police. A popular lawyer who has been documenting the atrocities counted and verified 16 individuals including a doctor who was treating injured protesters. Human rights groups place the toll at 300 people which include those killed in the aftermath in informal settlements. Authorities have not been able to verify the claims from the human rights groups.
Aftermath.
The President deployed the military to quell the protests. The move was done illegally since military deployment needs parliament approval and it was challenged in court which halted the deployment terming it unconstitutional and an affront to the rule of law.
Antonio Guterres, UN Secretary-General, said he was deeply concerned about the escalation of violence and urged for calm. The main opposition leader, Raila Odinga, who has taken a backseat from national politics in order to campaign for the AU Chairperson seat urged the President to listen to the demands of the protesters.
Several Western Embassies issued a joint statement condemning the violence and urged for dialogue. Other countries like Russia, India, and China issued a travel advisory warning their citizens to be careful due to the “internal political situation” as framed by the Russian Embassy in Kenya.
Several commentators took it upon themselves to deride Ruto and link the protests to the designation of Kenya as a major non-NATO ally and criticize his foreign policy that many have viewed as excessively pro-West.
The African Union also urged restraint and calm and reiterated its stance that dialogue is the way forward.
Fast forward
The bill was announced scrapped in a late Wednesday presser as the President swore that he had “listened” to the youths.
There have previously been protests in Nairobi, the nation’s capital, but campaigners and others have cautioned that the stakes are even higher. Even as further protests were organized for the State House on Thursday, Ruto vowed to put an end to the disturbance “at whatever cost.” Alongside police, who were charged with killing multiple people on Tuesday, were soldiers on patrol.
As the cost of food, fuel, and other needs skyrocketed, young people declared they were banding together to hold the government accountable. Long-standing dissatisfaction with official corruption has intensified alongside inequality among Kenyans in Nairobi, a hub for expatriates in the region and the location of a UN complex.
Many young people who celebrated Ruto’s election to power on his promises of economic relief are now complaining about the painful measures. On Tuesday, unrest broke out in multiple towns outside of the capital including in his home turf of Eldoret and the situation is expected to worsen if Ruto doesn’t satisfy people fully.
