A raft of fiscal reforms by President William Ruto of Kenya, aimed at increasing the country’s revenue to address its mounting fiscal challenges, has got the East African nation rumbling since last month. A Finance Bill with a new tax regime being considered by the parliament had provided the trigger. The Bill has however been dropped as a wave of nationwide protests it set off was capable of consuming the country and government.
Faced with a daunting debt burden of $80 billion, which had compelled the government to use more than half of its annual tax revenue to service it, the administration had proposed a hike of the Value Added Tax (VAT) to 16 per cent. This would have certainly spiked the costs of essential commodities like bread and sugar. Also, the fiscal proposal included a hike in the excise duty on vegetable oil, while a 2.5 per cent motor vehicle tax and eco levy on locally manufactured goods, such as sanitary pads, were part of the revenue reset template…