Following tragic protests that resulted in the parliament being set on fire, the president said last Wednesday that he would withdraw the law containing the contentious tax hikes.
However, he acknowledged on Sunday that the country had regressed by two years by abandoning the bill, citing the challenge of not being able to produce additional revenue in the face of a massive debt load.
He added that in order for Kenya to “be able to run our government,” it would be necessary to borrow one trillion shillings ($7.6 billion; £6.1 billion).
The additional taxes were projected to raise about 350 billion Kenyan shillings, and another 600 billion was intended for borrowing.
The president claimed that the proposed tax changes were part of his attempts to reduce the nation’s $80 billion (£63 billion) debt load. Kenya uses almost 60% of its revenue from collections to pay off debt.
“I have been putting forth a lot of effort to get Kenya out of its debt trap… As a nation, it is simple for us to say, “Let’s reject the finance bill.” That’s alright. The President said to reporters on Sunday night, “And I have graciously said we will drop the finance bill, but it will have huge consequences.”
