Kenyan President’s Tax Proposals Face Setbacks

- Ruto's government has faced two significant setbacks
- Nyoro expressed concerns about significant shortfalls
- The government has appealed the ruling
Kenyan President William Ruto’s government has faced two significant setbacks in its efforts to raise taxes to address its financial challenges.
Firstly, the government withdrew its finance bill for the upcoming year following widespread protests and parliament being set alight.
Secondly, the appeals court ruled that the 2023 tax legislation was “fundamentally flawed” and “unconstitutional” due to procedural issues.
These developments pose challenges for the government’s ability to raise revenue to fund its national budget and service its $78bn public debt.
The parliamentary budget committee chairman, Ndindi Nyoro, expressed concerns about significant shortfalls in this year’s budget and limited government ability to operate.
The government’s financial difficulties are further complicated by the need to align spending with the finance legislation from 2022.
Economist Odhiambo Ramogi notes that the court decision creates uncertainty for taxpayers, although collected taxes will not be refunded.
The government has appealed the ruling and requested a suspension until its appeal is heard, citing concerns about disrupting government services.