Kenya’s Finance Minister Njuguna Ndung’u on Thursday presented the nation’s largest-ever budget, introducing contentious tax proposals aimed at addressing a significant public finance deficit.
The 2024/25 budget, amounting to four trillion shillings ($31.1 billion), marks an increase from the previous year’s 3.75 trillion shillings.
To reduce the budget deficit from 5.7% to 3.3% of GDP, Ndung’u submitted a finance bill proposing substantial tax hikes across financial services, manufacturing, and retail sectors, including a 2.5% motor vehicle tax and the reintroduction of VAT on bread.
The bill, designed to reduce external borrowing, has sparked criticism from politicians, employed citizens, and industry groups, who argue it burdens an already struggling population.
Economic analysts warn the taxes could slow economic growth, and the parliamentary budget office forecasts a potential $2.6 billion shortfall in revenue for the current fiscal year.
Despite opposition, the bill is expected to pass due to the ruling party’s parliamentary majority.
Critics, including opposition leader Raila Odinga, have condemned the taxes as punitive and insensitive, while concerns over high unemployment and inflation persist.
