Kenya To Reintroduce ‘Controversial’ Taxes to Raise $1.2 Billion
In an effort to tackle an impending budget deficit, the Kenyan government is set to reintroduce some controversial taxes originally part of a finance bill that was initially withdrawn following deadly street protests in June. President William Ruto had scrapped the bill in June after violent clashes in Nairobi, which saw demonstrators storming parliament and police firing live ammunition.
However, the Finance Minister, John Mbadi, revealed on Sunday, August 18, on Citizen TV that the Kenyan government plans to implement around 49 new tax measures, aiming to generate roughly 150 billion shillings ($1.2 billion). Among these is an “eco levy” targeting electronic goods and plastic packaging, intended to curb environmental damage.
Mbadi, who now serves in a revamped cabinet alongside opposition figures, emphasised that those harming the environment should bear the cost of remediation, However the new tax measures are anticipated to be approved by the end of September.
The Effect Of the Scrapped Kenyan Finance Bill
The scrapping of the initial finance bill, which sought to raise about $2.7 billion, was scrapped in favor of spending cuts and increased borrowing to manage the fiscal shortfall. However, this decision led to global credit rating agencies Moody’s and Fitch downgrading Kenya’s credit rating due to concerns over its $78 billion public debt.
