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Kenyan lawmakers vote to double fuel tax, impose housing levy


By Duncan Miriri

NAIROBI (Reuters) – 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.

Ruto’s government argues the higher taxes are necessary to stabilise government finances, which have been strained by growing debt repayments and lower than expected growth in tax collection.

The move to double the fuel tax to 16% will generate the government an extra 61 billion shillings ($434.94 million) by itself, Kuria Kimani, the chairman of parliament’s finance panel, said on Citizen Television.

The bill now moves to the president for signing.

During a session that ran late into the night, lawmakers from Ruto’s ruling coalition defeated opposition attempts to strike out the fuel tax hike as well as a new 1.5% housing tax on employees that will be matched by employers.

They also approved a new withholding tax for digital content creators.

The opposition says the housing levy will strain already squeezed incomes and raise business costs at a time when Kenyans are struggling with high prices for basic commodities.

Ruto says it will fund the construction of homes for the poor, offering them dignity and creating jobs for young people.

An opposition senator has challenged the finance bill in court, arguing that some of the measures are unconstitutional. It was not immediately clear when the court will issue a ruling.

($1 = 140.2500 Kenyan shillings)

(Reporting by Duncan Miriri; Editing by Aaron Ross and Christina Fincher)

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