Kenya’s President at a Crossroads as Demos Resume Ahead of Crucial Finance Bill Vote

GOOBJOOG NEW/NAIROBI: Street demonstrations in many parts of Kenya are today resuming as members of parliament are expected to vote on the amendments and to cast the final vote for the controversial Finance Bill which has sparked outrage and anger among many Kenyans.

The Bill is expected to be tabled today for the Third Reading after the Committee Stage upon which lawmakers will debate and vote for amendments made at the Second Reading last week. The lawmakers will vote on  clause-by-clause basis on the amendments which were approved last week. A simple majority is needed in all stages including the final Third Reading.

The government side has the number in the National Assembly and can push its way through.

Following a spirited rejection led by the young people under the ‘Gen Z’ umbrella, the government side yielded and made a raft of changes to the bill. Among the changes were the removal of 16 per cent VAT on bread, transportation of sugar, financial services, foreign exchange transactions as well as the 2.5 per cent Motor Vehicle Tax.

The government also said it will not be lobbying for an increase of mobile money transfer fees, and Excise Duty on vegetable oil has also been removed. Additionally, the government side also dropped a proposal to impose levies on the Housing Fund and Social Health Insurance.

The Kenyan Kwanza administration also yielded to public pressure to drop eco levies on locally manufactured products which include sanitary towels, diapers, phones, computers, tyres and motorcycles.

However, many Kenyans remain unconvinced noting there remain a raft of punitive tax proposals in the bill.

Experts argue that the President may need to consider postponing the Third Reading after the Committee Stage to assuage public pressure as he seeks a way out with the protestors.

However, the protestors who are determined to have their way have called on the President to withdraw the Bill completely. Accordingly, the President has this option and the government operationalise the Appropriations Act, otherwise known as the National Budget using the Finance Act 2023.

President William Ruto made indications Sunday of a possible path to dialogue acknowledging the activism of the Kenyan youth. However, he remains ambivalent on the matter amid pressure to raise revenue to fund its government’s development agenda.

The National Treasury has warned of of a $2 billion shortfall should the bill be rejected noting this will adversely affect the implementation of key development projects and the provision of services.