Kenyan President William Ruto has sent a highly contentious finance bill that sparked nationwide protests that left at least two dozen people dead back to parliament, The Star reports.
Ruto was due to address the nation at 4:00 p.m. local time on Wednesday, at which point he is expected to lay out his specific concerns about the Finance Bill, 2024.
The day before, many hundreds of protesters stormed Kenya's parliament, drawing fire from police. A 'security emergency' was later declared.
News that Ruto had not signed the bill comes hours after the Kenyan diaspora in the United States, the Law Society of Kenya, and prominent figures such as lawyer Ahamed Nasir, the Kenya Catholic Bishops and other human rights organisations urged Ruto to withdraw the bill.
State House sources told The Star that the Finance Bill, 2024 would be sent back to parliament before lawmakers break for recess later on Wednesday (June 26). Ruto has also proposed a raft of amendments, they said.
Some of the tax proposals earlier introduced in the bill include imposing a 16% VAT on bread, excise duty on vegetable oil, VAT on transportation of sugar, a 2.5% Motor Vehicle Tax and an Eco Levy on locally manufactured products.
While those taxes have since been dropped, after earlier protests, Kenyans again took to the streets this week to protest any further measures to raise levies amid what local media describe as a cost of living crisis. Some who stormed the parliament and set fires were met by riot police and teargassed.
Parliament is set to go in recess until July 23. If MPs amend the bill fully accommodating the Ruto’s reservations, the speaker shall then resubmit it to the president for assent.
“If the House considers the president’s reservations, it may pass it a second time, without amendment, or with amendments that do not fully accommodate his reservations,” The Star writes. “This must have, however, been supported by two-thirds of the members.”
Since coming to office in 2022, Ruto has introduced several new and unpopular taxes with the aim of eliminating the country’s national debt of nearly $80bn. Those included a housing levy of 1.5% of a worker’s monthly pay, which goes towards the construction of affordable housing.
Critics of the latest proposals say they will stifle economic growth and lead to higher unemployment. Opposition leader Raila Odinga earlier urged MPs to vote to remove clauses in the finance bill that would burden the poor.
Kenya last week announced a 3.3% budget deficit to gross domestic product (GDP) for the coming fiscal year, up slightly from the 2.9% it had initially projected but still significantly narrower than the 5.7% projected for the current fiscal period, fulfilling a key objective of an International Monetary Fund (IMF) programme.
The IMF has classified Kenya as being at high risk of debt distress, having repeatedly failed to reduce its budget deficits. Many Kenyans have bristled at the Ruto government’s new taxes aimed at boosting revenue, putting the blame on officials they view as corrupt and incompetent.
Annual inflation edged up slightly to 5.1% in May from 5% the previous month, as vegetable prices rose after torrential rains swept away crops in farms across the region.
Kenya’s shilling has been world’s best-performing currency so far this year, helping moderate prices of key imports, including food and fuel. The unit has strengthened about 20% year to date, according to data compiled by Bloomberg.
