Why has Kenya's finance bill triggered protests?

Protestors react during a demonstration against Kenya's proposed finance bill 2024/2025, in Nairobi, Kenya, June 20, 2024. REUTERS/Monicah Mwangi

Protestors react during a demonstration against Kenya's proposed finance bill 2024/2025, in Nairobi, Kenya, June 20, 2024. REUTERS/Monicah Mwangi

What’s the context?

Despite Kenyan president's climbdown on tax-boosting finance bill, some Gen Z and millennial protesters vow to continue demonstrations

  • Kenyan president backs down and withdraws finance bill
  • Protesters vow to continue, demand president resigns
  • Heavy security in Nairobi,  more protests expected

NAIROBI - Kenya was bracing for fresh protests on Thursday with some demonstrators demanding the resignation of President William Ruto despite his climbdown on proposed tax hikes that sparked a week of protests, in which at least 23 people were killed.

Ruto said on Wednesday that he would withdraw a new finance bill, which proposed a slew of taxes, after protesters briefly stormed the parliament in Nairobi, sparking deadly clashes with police firing live bullets and tear gas on the streets. 

But Ruto's climbdown did not satisfy some of the protesters, largely made up of Gen Z and millennials. They want the president to resign and say they do not trust the government to withdraw the finance bill in its entirety.

Here's what you need to know about why the bill has stirred so much outrage in one of Africa's most vibrant economies. 

What is the finance bill?

The bill is part of Kenya's 2024/25 budget and proposes tax hikes on various goods and services as a means to increase government revenues.

Provisions in the bill include imposing 16% VAT on bread as well as tax hikes on mobile money transfers and a new annual 2.5% tax on cars.

The bill also proposes an eco-tax on products that are considered harmful to the environment - such as packaging, plastics and tyres - and would increase the cost of items including nappies, sanitary towels, computers and mobile phones.

Other taxes include 16% VAT on some financial services and foreign exchange transactions.

Income from the operation of digital marketplaces and digital content will also be taxed under the bill.

Ruto has said the measures, which would raise $2.7 billion in additional taxes, are aimed at reducing Kenya's reliance on borrowing to fund its budget.

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Why are Kenyans angry about it?

Already overburdened by the high cost of living, Kenyans have faced a torrent of tax hikes, including on salaries and fuel, since Ruto was elected in 2022.

The government has also introduced a 1.5% housing levy - to build affordable homes for the poor - on monthly income and a higher health insurance tax is due to come into effect in July.

Opponents say the bill is the final straw for many Kenyans. 

In recent weeks, Kenyans have criticised the draft legislation online and organised nationwide protests under trending hashtags such as #RejectFinanceBill2024, #RutoMustGo #OccupyParliament and #TotalShutdownKenya on social media sites such as TikTok and X. 

An online petition on Change.org has garnered more than 113,000 signatures since its launch on June 15. 

Thousands of demonstrators have taken to the streets in coordinated marches across Kenya, including in Nairobi where riot police used live rounds, tear gas and water cannons to disperse the crowds.

More protests are planned on Thursday as part of what demonstrators are calling "7 Days Of Rage!" from June 21-27.

The bill has also faced attack from civil society organisations, such as the Law Society of Kenya, as well as from private business owners, who say it could affect sectors such as retail, finance, the internet, transport and manufacturing.

How have the authorities responded?

Kenya's security forces have been accused by rights groups of using excessive force against peaceful protesters.

At least 23 people have been killed in the protests, according to rights groups and the police watchdog.

Hundreds of protesters have also been arrested and although many have been released, scores remain in police custody. 

Ruto last week offered to amend the finance bill and drop some of its planned taxes.

These included the proposed levies on bread, motor vehicles, vegetable oil, transportation of sugar, and financial services.

The proposed eco-levy on locally manufactured products - including sanitary towels, diapers, phones, computers, tyres and motorcycles - would also be scrapped.

In addition, there would be no tax increases on mobile money transfer fees and internet data charges.

But protesters said the concessions did not go far enough and demanded the entire bill be scrapped.

Bowing to pressure, Ruto announced on Wednesday that he would withdraw the bill.

"Listening keenly to the people of Kenya who have said loudly that they want nothing to do with this finance bill 2024, I concede," Ruto said in a televised address.

"And therefore, I will not sign the 2024 finance bill, and it shall subsequently be withdrawn," he added.

Why are some Kenyans continuing to protest?

While many protesters have welcomed Ruto's climbdown, some say they do not trust the government to scrap the bill and believe that tax hikes will be reintroduced under other legislation.

They are also angered by the deaths of their fellow demonstrators and are demanding that those responsible be held to account for what they call the excessive force used by security forces.

Some of the young protesters say they will continue demonstrating until the president resigns.

"This government says one thing and does another. We do not believe them about the finance bill. We do not believe that we will get justice for the lives lost of our brothers and sisters," said Antony, a 23-year-old engineering student.

"We will not stop. Ruto must go," he told Context.

This article was updated on June 27, 2024, after President William Ruto announced that he would withdraw the finance bill 2024.

(Reporting by Nita Bhalla; Editing by Clar Ni Chonghaile.)

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