MPs hold key to calm as unpopular Ruto tax proposals go to the House

Tuesday June 13 2023

Activists shout as they march during a protest over tax hike plans in Nairobi, Kenya on June 6, 2023. PHOTO | SIMON MAINA | AFP


Kenya’s parliament will resume debate on President William Ruto’s tax proposals that could push the country into another round of social unrest if passed.

The tax proposals introduced through the Finance Bill have met a groundswell of opposition outside parliament, with labour unions, employer lobby groups, trade associations and civil society groups among those calling for amendments or withdrawals.

The Bill, among other things, proposes a housing levy on workers’ salaries, increased taxes on fuel, and new taxes on beauty tax products.

The president is desperate to have it passed to enable him to raise the revenues he says he needs to fund his administration’s outsize maiden budget of Ksh3.59 trillion ($26 billion) and begin weaning the country off its external borrowing binge.

The budget could rise to Ksh3.67 trillion ($26.3 billion) if MPs approve an additional allocation recommended by the House Budget Committee.

But opponents of the Bill argue it will worsen the high cost of living crisis, cripple businesses and trigger job losses in the country.


Read: Joblessness a threat to Ruto’s taxation plan

MPs on the bipartisan parliamentary Finance Committee, which conducted public hearing on the Bill over two weeks, have hinted at the possibility of recommending some amendments in its report to the House next week.

Chances of any changes being approved are, however, slim given President Ruto’s Kenya Kwanza coalition outnumbers the opposition side by a big margin in the 349-member National Assembly.

National Assembly Speaker Assembly in a ruling last October put the number of the ruling coalition’s MPs at 179 against the opposition’s 157, citing controversial post-election arrangements signed with small parties formerly affiliated to the opposition Azimio La Umoja One Kenya Alliance.

Shifted loyalty

The margin has since grown wider after more opposition MPs, including some independents, shifted loyalty to the president.

With the balance of power in parliament tilted in favour of his ruling coalition, the president will most likely have his way on the proposed taxes.

Read: Ruto-Uhuru duel threatens fresh round of mass action

In recent days, he and his deputy Rigathi Gachagua have also come out to whip the Kenya Kwanza coalition legislators into line in their public statements, rebuking any dissenting voices and threatening to de-campaign them if they seek re-election.

In the run-up to the resumption of the debate in Parliament, the State has also appeared to activate its propaganda machinery to try to sway public opinion.

Economist Kwame Owino, who heads the economic think-tank Institute of Economic Affairs, found himself on the receiving end of a vicious attack by social media bots and influencers soon after he argued against the proposed housing levy in a Wednesday TV debate with Kenya’s Trade minister and the chief bureaucrat tasked with promoting the government’s affordable housing programme.

While the Ruto administration continues to sell the Finance Bill as the magic wand for fixing the country’s ailing economy, it risks nudging the country into another round of social unrest with its hardline position on proposed taxes on basic commodities like fuel that could see the cost-of-living rise further.

The opposition 'Azimio' One Kenya Alliance, buoyed by the souring public mood over the Finance Bill and its success shutting down the economy in the capital Nairobi and some towns in western Kenya with its street protests in March, has already put the government on notice.

“Should Ruto overrun the National Assembly, we will regroup and overrun him in the wider National Assembly of the whole people of Kenya,” opposition leader Raila Odinga warned in a statement on Thursday.