Ruto faces crucial test as tax policy hangs in the balance

Exactly six months after tax proposals ignited deadly nationwide protests, President William Ruto’s administration faces a pivotal moment as it prepares to unveil its new budget cycle.
The Budget Policy Statement, set to be submitted to Parliament in two weeks, could determine the fate of Ruto’s government amid fears of fresh public outrage over potential tax hikes.
The 2024 Finance Bill protests, which forced the government to withdraw contentious proposals, led Ruto to reshuffle his administration and co-opt opposition leaders into a broad-based coalition. Now, the Kenya Kwanza government is walking a fiscal tightrope—balancing a growing deficit against the risk of reigniting unrest.
Treasury Cabinet Secretary John Mbadi, in a phone interview with Kurunzi News sought to calm public concerns, promising a tempered approach.
“I don’t think Kenyans should brace themselves for any high taxes because we have made a commitment that we are not going to introduce any punitive taxes,” Mbadi said. “Going forward, we will see minimal changes on taxes.”
Despite Mbadi’s reassurances, the specter of discontent looms. Opposition leaders have warned that any attempts to increase taxes could see Kenyans return to the streets. Wiper leader Kalonzo Musyoka last year urged the government to avoid antagonizing citizens with new levies.
Machakos Governor Francis Mwangangi echoed this sentiment, cautioning that heightened taxation could spark unrest.
“Kenyans, if they feel highly taxed, will go back to the streets,” Mwangangi said. “They are seeing a big budget for the executive, which does not help this country at all. Kenyans do not see value for the high tax extracted from them.”
The June 2024 anti-tax protests cost the government over Sh6 billion, according to Government Spokesperson Isaac Mwaura. Activists like Suba Churchill emphasize that public participation is key to avoiding another crisis.
“The clincher in all these is meaningful involvement of people and being sensitive to public sentiments,” Churchill said. “What led to the uprising against the previous Finance Bill was the perception that the government appeared insensitive to public opinion.”
Treasury has been proactive in its outreach, hosting public engagements and soliciting input from professionals to shape the budget process. Mbadi also confirmed that a second and final supplementary budget for 2024-25 would be presented to Parliament by the end of January.
“We don’t want to get into the bad habit of preparing too many supplementary budgets,” he said. “Unless something drastic happens, this will be the last.”
The BPS, a key document outlining the government’s fiscal priorities, will set the stage for Kenya’s financial trajectory. However, the road ahead is fraught with challenges. With no room left for additional borrowing and social security contributions set to rise in February, the administration must tread carefully to avert economic and political fallout.
As the countdown begins, all eyes will be on Parliament’s response to the BPS and whether the Ruto administration can steer the country away from another season of protests and fiscal turmoil.