Kenya rises over loaves

Any measure that raises the price of bread is tantamount to meddling with the lives of countless individuals worldwide. In several cases, this has sparked revolutions. For example, the French Revolution of 1789, which began in Versailles.

In Kenya, the current wave of protests by the Anti-Finance Bill 2024 was partly fuelled by the imposition of 16 per cent Value Added Tax on bread.

Kuria Kimani, the head of the parliamentary Finance Committee of Kenya, stated in May that the National Treasury had proposed imposing a value-added tax (VAT) on bread due to the high prevalence of diabetes among bread consumers.

“We had a long conversation with the National Treasury on this VAT on the floor. The initial thinking was maybe there is a concern about diabetes and all that,” Kimani said

This is one of several taxes proposed in the 2024 Finance Bill by the Kenyan government, which was scheduled to be presented in Parliament. However, Kenyans, particularly the youth (Gen Z), mobilized for demonstrations against the Bill.

The demonstrations have continued despite the removal of the 16% tax on bread, the value-added tax (VAT) on sugar transportation, financial services, and foreign exchange transactions.

The ruling Kenya Kwanza Parliamentary Group convened at Nairobi’s State House on Tuesday. Finance Committee Chairman Kimani Kuria presented the amendments made to Finance Bill 2024 to Senators and Members of Parliament.

The proposed 16 percent VAT on bread, sugar transportation, financial services, foreign exchange transactions, and 2.5 percent motor vehicle tax have been removed from the Finance Bill.

Furthermore, the excise duty on vegetable oil has been eliminated, and there won’t be any increases to mobile money transfer costs.

The proposed Eco Levy will only be applied on imported finished goods that, when no longer in use, contribute to e-waste and damage the environment.

As a result, goods made locally—such as diapers, tyres, computers, phones, and motorcycles—will not be subject to the eco levy, however it will be imposed on imported finished products

According to President Ruto, his government is working to limit the importation of goods that can be made locally in order to support local industry and keep jobs for the populace.

“The stability you see in the foreign exchange regime is a result of our deliberate policies to reduce imports of things that are produced locally,” the President said.

In order to safeguard local producers, the Finance Bill has also levied an excise levy on imported potatoes, onions, and table eggs.

The Bill proposes to tax alcoholic beverages’ excise duty according to their alcohol content rather than their volume.

Raising taxes on alcohol with a high alcohol content, according to Kenya’s Deputy President Rigathi Gachagua, will help combat alcoholism.

President Ruto added that the Executive and the Legislature will keep collaborating to make the best choices for the nation.

President Ruto further cited the strengthening of the Kenya shilling versus the dollar and the decline in inflation from 9% in 2022 to 5.1% in May as evidence that his hard decisions have paid off.

In order to minimize borrowing and guarantee that the nation lives within its means, he stated that the government is striving to have a balanced budget in the next three years.

Even still, some Kenyans have remained upbeat despite the news that their government has backed down and removed some of the controversial taxes of the Bill, calling the action a smoke screen.

They said the removal of the proposed 16 per cent VAT on things like bread while increasing taxes on other equally basic imported commodities was typical of a government that wants to give with one hand and take with the other.

Youths used the hashtag #OccupyParliament to create a social media rallying cry a few days before Tuesday’s rallies, pushing Kenyans to go in large numbers.

Mombasa saw protests on Wednesday, Today Nairobi has also seen these protests for the second time.