Kenya’s parliament voted late on Wednesday to approve a contentious government finance bill that will double the fuel tax and introduce a new housing levy, handing a victory to President William Ruto.
Ruto, who took office nine months ago, is pushing through a raft of tax hikes as part of his maiden budget, sparking sharp resistance from the opposition, ordinary people and businesses.
The opposition has threatened to call fresh protests if Ruto signs the tax increases into law. Street demonstrations earlier this year against the high cost of living repeatedly turned violent in the capital Nairobi and elsewhere.
The administration of Ruto claims that raising taxes is required to stabilise the country’s finances, which have been put under pressure by rising debt obligations and slower-than-anticipated increase in tax revenue.
The decision to raise the fuel tax to 16% will bring in an additional 61 billion shillings ($434.94 million) for the government, according to Kuria Kimani, the head of the parliamentary finance committee, who spoke on Citizen Television.
The president is now supposed to consider the legislation for signing.
Legislators from Ruto’s ruling coalition resisted attempts by the opposition to overturn the fuel tax increase and a new 1.5% housing tax on employees that will be matched by employers during a session that lasted late into the night.
A new withholding tax for those who produce digital content was also approved.
In a time when Kenyans are grappling with high prices for essential items, the opposition claims that the housing fee will put additional burden on already strained budgets and drive up company costs.
According to Ruto, this will help the underprivileged build homes for themselves, giving them a sense of pride while also giving young people jobs.
A senator from the opposition filed a legal complaint against the budget bill, claiming that some of the provisions are illegal. It was unclear when the court would make a decision right away.
