Kenya’s finance ministry is turning to the public for suggestions on new legislation aimed at boosting revenue and addressing economic challenges, Finance Minister John Mbadi announced on Monday. This move comes after protests led the government to withdraw a controversial finance law in June.
President William Ruto’s administration had proposed tax hikes totaling more than 346 billion Kenyan shillings ($2.7 billion), which triggered mass protests that resulted in over 50 deaths. The protests forced the government to scrap the planned tax increases, leaving the already indebted country with an even larger budget deficit.
“We are barely managing. This is not where we wanted to be, but we are here,” Mbadi said during a budget meeting. Mbadi, who was appointed from the opposition last month, emphasized the need for stability in the government.
While Mbadi initially suggested reviving some of the scrapped tax hikes, he later reversed course after public backlash and renewed threats of protests. He will now issue a circular inviting public participation to submit legislative reform proposals by September 20.
Kenya’s debt levels have exceeded the limits recommended by international institutions like the World Bank and the International Monetary Fund, largely due to infrastructure-related borrowing. Despite the economic strain, Mbadi ruled out any possibility of debt restructuring, insisting that the country would continue servicing its debt.
In the medium term, once the economic situation stabilizes, the government will consider tax cuts, including reducing VAT from 16% to 14% and lowering corporate income tax by 5 percentage points to 25%.
At the current exchange rate, $1 equals 128.25 Kenyan shillings.
