Kenya govt to unveil budget amid tax hike anger

Kenyan President William Ruto’s government is set to present its budget to parliament Thursday in the face of widespread anger over a range of proposed tax hikes to shore up depleted public finances.

It is Ruto’s maiden budget since he took office at the helm of the East African powerhouse in September last year following a bitterly contested election race.

Although Ruto pledged on the campaign trail to help poor Kenyans known as “hustlers”, he has been accused of introducing policies that have actually made their lives harder.

His government has drawn up a 3.6-trillion shilling ($25.7 billion) budget for 2023/24 with new or increased taxes outlined in a separate finance bill expected to generate $2.1 billion in revenue.

Ruto is seeking to replenish the government’s coffers and repair a heavily-indebted economy inherited from his predecessor Uhuru Kenyatta, who splurged on major infrastructure projects.

“We have to have some short-term sacrifices for us to achieve the long-term. We have to sacrifice for the future,” Treasury Minister Njuguna Ndung’u told local station Citizen TV on Thursday before he submits the budget to parliament.

But Kenyans are already feeling the pinch from soaring prices for basic necessities, along with a sharp drop in the value of the local currency and the worst drought in four decades.

Economic growth slowed last year to 4.8 per cent from 7.6 per cent in 2021, reflecting the global fallout from Russia’s invasion of Ukraine and the drought buffeting the vital agriculture sector.

Kenya is also sitting on a public debt mountain of almost $70 billion or about 67 per cent of gross domestic product (GDP), and its repayment costs have jumped as the shilling sinks to record lows of more than 139 to the dollar.

Ruto has said that the finance bill, which sailed through a second reading in parliament on Wednesday, will ease the debt burden, stimulate the economy and create jobs in the East African nation.

But opponents have warned the new measures will further hit people already struggling to make ends meet as the cost of living crisis bites.

The proposed legislation calls for new or increased taxes on a wide range of basic items including fuel and food, as well as mobile money transfers, beauty products and digital content.