Kenya’s government was set to present its budget to parliament on Thursday, carefully prepared to avoid a repeat of massive protests over tax hikes a year ago.
The east African nation is a regional economic powerhouse but tensions have simmered over the soaring cost of living and a stagnant job market.
Last year’s finance bill sparked huge public anger by raising taxes on everyday items, culminating in thousands storming parliament on June 25, forcing President William Ruto to cancel the bill.
At least 60 people were killed in weeks of protests, and rights groups say dozens more were illegally detained by security forces in the aftermath.
This year the government has played it safe.
Rather than tax hikes for consumers, the new bill has focused more on businesses, while seeking to reduce government spending and close tax loopholes as a way to increase revenues.
The government faces a daunting task in boosting social services and investment in the face of huge debts — a common issue across Africa — with interest payments already greater than its spending on health and education.
Analysts say the new budget is unlikely to provoke the public anger of last year, but critics say it still includes backdoor price increases and will hurt small businesses.
“This year’s finance bill is, in comparison to last year’s, very much seeking to avoid controversy,” said Patricia Rodrigues, of global consultancy Control Risks.
But she said it will be “difficult for a lot of businesses to swallow because it includes potential increases on income taxes and social contributions, and the end of some tax holidays for corporates and medium and small enterprises”.
The World Bank earlier this year reduced its growth projections for Kenya from 5.0 to 4.5 percent in 2025.
Kenya is currently seeking a new agreement with the International Monetary Fund, meaning its funding will not be included in the budget.
Rights
A bigger concern for many Kenyans has been the government’s rights record.
Last month, a young software developer was arrested and charged with cybercrime breaches after building a website opposing the new bill, which she said would raise living costs and undermine privacy rights by allowing greater data access for tax inspectors.
This week, news was dominated by the death of a man while in police custody after he criticised a senior officer.
Such incidents have attracted only small protests so far, but there is widespread anger across the country.
“Just because the tax issue is no longer at the forefront of people’s minds does not mean that protests or unrest will not be mobilised,” said Rodrigues.
“In recent months, the track record of the administration on human rights and corruption is what has been causing people to mobilise more,” she said.
