Kenyan President Faces Tough Times with Tax Plan Failures
Kenyan President William Ruto is having a rough time with his tax plans. First, he had to withdraw his new tax proposal after huge protests and even a fire at parliament. Then, the appeals court knocked down his tax plans from last year, saying they were flawed and not done correctly.
This mess makes it hard for the government to raise money needed for its $78 billion debt and national budget. Ndindi Nyoro, head of the parliamentary budget committee, told the BBC that these setbacks could lead to a big budget shortfall, possibly up to $3.8 billion in lost revenue.
The government usually introduces a finance bill each July to add or change taxes, but this year’s was withdrawn, causing confusion. With two years of tax plans now in trouble, the government might have to go back to the 2022 tax laws, according to economist Odhiambo Ramogi.
The government has appealed the recent court decision to Kenya’s Supreme Court, asking for a delay until their appeal is heard. This delay could affect government services and finances. The Supreme Court has agreed to hear the case quickly, even though it’s normally on break in August.
With public anger over taxes high, Kenyans are pushing for lower prices, especially for fuel. Economist Ken Gichinga suggests that the government might need to draft a new tax bill or find other ways to borrow money. However, given the country’s high debt and recent credit rating downgrades, borrowing more could be tough.
Policy expert Vincent Kimosop says that the Kenyan public is becoming more involved in how their country is run, so any new tax plans will need to consider public opinion. Cutting government spending might also be necessary, though this could hurt crucial services like education and healthcare.
In response, President Ruto has signed a new law to cut government spending by about $1.2 billion, reducing budgets for various areas. However, the government also faces legal challenges from rights groups arguing that the spending cuts did not follow the law properly.
As the government deals with these challenges, there’s no guarantee of success, and President Ruto’s options are looking increasingly difficult, as noted by the BBC.
Credit : BBC
https://www.bbc.com/news/articles/c39kk4pdek2o