Kenya Finance Bill 2024: Bread and other tax proposals scrapped amid public outcry

The Kenyan government scrapped some proposed taxes in this year's controversial finance bill, including a 16% levy on bread after a public outcry.

The MPs' announcement came as police fired tear gas and water cannons to disperse angry protesters in the capital, Nairobi.

Dozens of people have been arrested, and lawyers earlier joined the chanting at the city's main police station demanding the release of the detainees.

Since coming to office in 2022, President William Ruto has introduced a number of new and unpopular taxes aimed at wiping out the country's nearly $80bn (£63bn) national debt.

But critics of the latest proposals fear they will stifle economic growth and lead to job losses.

Some protesters marched in the capital calling on the president to step down, chanting, “Ruto must go! Ruto must go!”

Parliamentary Finance Committee Chairman Kuria Kimani announced the U-turn on the new finance bill at a press briefing attended by President Ruto and other ruling coalition lawmakers.

His finance team is gathering public feedback on the bill and he said the decision was made to drop some proposals to protect Kenyans from the rising cost of living.

Other proposed taxes that have been dropped include those on cooking oil, mobile money services and motor vehicles, which critics say will also hit the insurance industry.

Mr Kimani announced against a proposed eco-tax that targets products seen as having a negative impact on the environment, such as packaging, plastics and tyres.

It faced a backlash with many arguing that it would increase the price of essential products such as nappies, sanitary towels, computers and mobile phones.

Tariffs will now apply only to imported goods, Mr Kimani said.

Mr Ruto did not speak or react during the briefing – but the move, seen as a capitulation to public pressure, would be a blow to his government.

He recently called on Kenyans to accept more taxes, arguing that they were indeed taxed, but he admitted that it would be difficult.

Taxes on payroll, fuel and gross sales have increased in the past two years.

A housing levy of 1.5% of a worker's monthly salary, which goes towards building affordable houses, has also been introduced.

A new higher health insurance tariff is also coming into effect soon

Lawmakers are due to debate the finance bill on Wednesday, which has led to protests in the capital.

The police have arrested several people for organizing protests.

Rights groups condemned the police response.

“I am very angry and I am fighting for my future,” one protester, Wangari, told AFP news agency on Tuesday.

“I'm still a young adult and I want to build myself up in this country. And with this kind of tax, with this kind of exploitation, how can I build a life.”