By Ikugbadi Oluwasegun

Kenya’s government has scrapped controversial tax hikes on bread, car ownership, and other items after hundreds of citizens protested outside Parliament on Tuesday.
The proposed taxes, aimed at reducing reliance on external borrowing, were met with fierce opposition, sparking protests dubbed “Occupy Parliament” that led to the arrest of over a dozen demonstrators and police firing tear gas.

The Finance Bill, due to be debated and passed before June 30, had proposed a 16% VAT on bread, transportation of sugar, financial services, foreign exchange transactions, and a 2.5% Motor Vehicle Tax, among other levies. However, following recommendations from a parliamentary committee, the presidency announced amendments to the bill, removing these contentious provisions.

Additionally, there will be no increase in mobile money transfer fees, and Excise Duty on vegetable oil has also been removed. The government had initially defended the tax hikes as necessary to raise 346.7 billion shillings ($2.7 billion), equivalent to 1.9% of GDP. However, President William Ruto acknowledged the changes, stating that lawmakers had listened to the people and adjusted the proposals accordingly.