KENYA’S finance ministry is seeking public input on new legislation to boost revenue after a controversial finance law was scrapped due to widespread protests, Finance Minister John Mbadi announced on M
onday. The move follows President William Ruto’s decision to discard tax hikes worth over KSh346bn ($2.7bn) in June, which led to public unrest and protests that left more t
han 50 people dead.
In a budget meeting, Mbadi, who was recently appointed from the opposition in an effort to stabilise Ruto’s government, admitted the country is facing severe financial difficulties. ‘We are barely managing. This is not where we wanted to be, but we are here,’ he said, acknowledging the government’s struggle with rising debt and budget deficits.
Initially, Mbadi suggested reviving some of the tax hikes from the abandoned finance bill but stepped back following public backlash. Now, the finance ministry will issue a circular, inviting the public to submit their suggestions for legislative r
eforms aimed at addressing Kenya’s economic challenges. Citizens will have until September 20 to provide their proposals.
Kenya’s debt has soared in recent years, driven by infrastructure projects, leaving the country heavily reliant on borrowing. Despite this, Mbadi ruled out debt restructuring, committing instead to servicing the country’s debt. ‘We will manage our debts and pay to remain afloat,’ he said
.
Mbadi also signalled the potential for tax cuts in the future, including reducing the value-added tax (VAT) on goods and services from 16 percent to 14 percent and lowering corporate inco
me tax by 500 basis points to 25 percent once the economic situation improves. The move is seen as part of an effort to balance Kenya’s fiscal challenges while responding to publ
ic demand for economic relief.
This marks a significant turning point in Kenya’s financial policy, emphasising greater public involvement in legislative reforms amid ongoing economic strain.
