In Kenya, recent pay stubs reveal a troubling trend: significant deductions for new taxes introduced to fund affordable housing and health insurance. Employees earning a monthly salary of 45,000 shillings (about $350) experienced a 9% decrease in their take-home pay, leaving them with only 262 shillings. Kennedy Odede, founder of Shining Hope for Communities, noted the distress among salaried individuals as payroll taxes rise. This tax burden is part of President William Ruto’s strategy to increase government revenue and manage the country’s overwhelming foreign debt, which has escalated due to years of excessive borrowing, the impacts of the COVID-19 pandemic, and inflation.
The government’s approach includes various new excise taxes on sugar, alcohol, and plastics, alongside increased fees for services like money transfers and internet data. Notably, taxes on business profits were raised to 3%, and import taxes on essential goods rose to support railroad development. Kenya faces a daunting economic landscape where nearly 60% of its revenues must cover interest payments on debts, reflecting a broader crisis across much of Africa. Many governments find themselves prioritizing debt repayment over vital services like health and education. With 40% of Kenyans living in poverty and youth unemployment at over 25%, the pressure on those who do pay taxes intensifies, contributing to a sense of injustice.
Elizabeth Okumu of SHOFCO expressed that increasing taxes have severely diminished purchasing power, exacerbated by the declining value of the Kenyan shilling, which has inflated the cost of imports. Essential goods are becoming increasingly unaffordable, forcing many families to make significant compromises in their daily needs. In the wake of prior tax hikes last year, deadly riots erupted in Nairobi, demonstrating public outrage over government fiscal policy. Despite initial government concessions, many tax increases were reintroduced shortly thereafter, further inflaming citizen discontent over financial mismanagement and corruption within the government.
The lack of faith in government efficacy is compounded by regular reports highlighting instances of corruption and financial misconduct, such as unaccounted funds earmarked for debt payments. Young Kenyans like Tatiana Gicheru and Jewel Ndung’u express their frustration with the absence of public services that would justify the increased taxation. They underscore a growing sentiment that, despite the dire economic climate, the government fails to deliver basic services like healthcare and affordable housing. This lack of accountability contributes to calls for direct public-led initiatives to address debt payments, minimizing reliance on government allocations.
The social ramifications are stark in areas like Kibera, where citizens face dilapidated infrastructure and limited access to sanitation services. Community leaders, such as Benedict Musyoka, reflect the disillusionment among youth who find it nearly impossible to secure jobs or stable futures. The economic crisis has led many young people to abandon hopes of starting families due to uncertain prospects. The inability of the government to address these fundamental issues demonstrates the broader impact of fiscal policy on social stability and individual lives.
Looking ahead, analysts emphasize the necessity of expanding the tax base and reforming existing exemptions, as current tax revenues remain substantially lower than those in wealthier nations. With the anniversary of the prior riots approaching and discussions of new budget measures, there is rising anxiety that these conditions could incite further unrest. As citizens like Okumu continue to labor under the weight of crushing taxes and inadequate public services, the hope for a brighter future feels increasingly elusive.
