Kenyan parliament panel urges govt to scrap some new taxes as hundreds protest

By Humphrey Malalo

NAIROBI (Reuters) -A Kenyan parliamentary panel recommended on Tuesday that the government scrap some new taxes proposed as part of next year's budget, as hundreds of protesters angered by the measures took to the streets in the capital Nairobi.

The tax hikes, including new levies on cars and bread, are the latest effort by President William Ruto's administration to boost revenue and reduce borrowing, but they have triggered widespread opposition.

Last year, the government introduced a housing tax and increased contributions to the national health scheme in moves that also sparked protests.

Kimani Kuria, chair of the Kenyan parliament's finance committee, said the committee recommended amending the government's funding bill for the 2024/25 fiscal year to remove a new tax on car ownership, higher taxes on financial and mobile phone charges and the imposition of value-added tax on bread.

As he spoke, Reuters witnesses saw police fire teargas to disperse hundreds of protesters demonstrating near the parliament building.

"We can't even afford diapers for the kids anymore ... we need this government to do something," protester Muthoni Wanjiku told Reuters.

Human rights groups and the country's media council, which accredits journalists, accused police officers of using excessive force to stop the protests, including briefly detaining journalists covering them.

Amnesty Kenya said 201 people were arrested during Tuesday's demonstrations, including journalists, observers from human rights groups and protesters.

"We demand the immediate and unconditional release of all arrested protesters and observers. We call on the (police) to uphold its duty to protect and respect the rights of Kenyan citizens to assemble peacefully," it said on its X account.

Adamson Bungei, Nairobi County Police Commander, did not answer phone calls seeking comment.

President Ruto told lawmakers from his governing coalition on Tuesday that he was happy "we are having a conversation about taxes and about debt and about what we need to do about it".

Opponents of the latest tax hikes say they could harm Kenya's economy.

On Wednesday and Thursday lawmakers will hold a line-by-line debate and vote on the legislation underpinning the budget.

This year's finance bill aims to raise an extra 346.7 billion shillings ($2.7 billion) in additional revenue, finance minister Njuguna Ndung'u said last week.

Some taxes in last year's finance law, including the housing levy, are still being challenged in court.

($1 = 128.0000 Kenyan shillings)

(Additional reporting by Jefferson Kahinju; Writing by George Obulutsa and Duncan Miriri; Editing by Alexander Winning, Christina Fincher and Susan Fenton)