Kenyans outraged over president's approval of tax hikes

By Andrew Wasike

NAIROBI, Kenya (AA) - Kenyan President William Ruto signed Finance Bill 2023 into law on Monday, which includes tax hikes, sparking anger among the opposition and ordinary Kenyans.

The bill, which was passed by the National Assembly last week, introduces significant tax increases and a new housing levy as part of Ruto's inaugural budget since assuming office nine months ago.

Kenya's opposition, which is led by Raila Odinga, promptly expressed its disapproval of President Ruto's endorsement of the bill, promising to take to the streets in protest.

Odinga’s spokesman, Denis Onyango, reiterated his opposition to the bill.

"Our stance remains the same, and we are firmly against it," he said.

Odinga has urged his supporters to come out in large numbers on Tuesday to be briefed on the way forward.

Outrage over the new law sparked a wave of discontent among Kenyans, with citizens taking to social media platforms to express their frustration and disappointment.

Hashtags condemning the tax hikes and criticizing President Ruto's decision have been trending.

"Fuel prices are already skyrocketing, and now they double the tax? It's going to make everything even more expensive, and it's ordinary people like me who will suffer," Jane Kariuki, a 32-year-old businesswoman, told Anadolu.

Sophia Matheka, a 45-year-old entrepreneur, said she is "really disappointed in the government. They keep burdening us with taxes while our salaries remain the same. This is unfair."

One of the most contentious aspects of the new law is the doubling of the fuel tax, which now amounts to a 16% value-added tax compared with the previous 8%.

This decision has sent shockwaves throughout the nation as Kenyan citizens grapple with already escalating fuel prices and the subsequent impact on their living costs.

Additionally, the new law brings forth the implementation of a new housing levy, albeit at a revised rate.

Originally proposed at 3% of gross pay, it was eventually amended to 1.5% after facing significant opposition.

Speaking to Anadolu, Ken Gichinga, chief economist at Mentoria Economics in Kenya, said the new law will have drastic effects on the economy.

"The doubling of the fuel tax will have a significant impact on the higher cost of living, lower production, and will actually lead to a slowdown in the economy. The housing tax will reduce disposable income," Gichinga said.

He added that it will also reduce the purchasing power of people and lead to a rise in unemployment.

Nevertheless, concerns persist regarding the potential burden this levy may place on already strained households, with people protesting the high cost of living on the streets, which has led to deaths, injuries, arrests and damage to property.

The opposition argues that the new law will disproportionately affect ordinary citizens and compound the existing economic challenges faced by many Kenyans.

The corporate sector has also joined the chorus of dissent, expressing fears that the tax hikes will hamper their operations and impede economic growth.