Kenyan lawmakers turned down Treasury's proposals to scrap tax breaks on a range of goods and services, citing concerns over inflation and dwindling investor confidence.

Nairobi

Kenyan lawmakers have rejected a Treasury proposal to remove tax breaks on a range of goods and services, including mobile phones, electric buses, and affordable housing builders. The decision was driven by concerns over inflation, the cost of living, and the need for consistent tax policy to support investor confidence.

The move follows deadly protests last year over tax increases and comes as Kenya seeks ways to boost revenue after abandoning an IMF program. An IMF team is currently in the country to assess corruption, which remains a significant challenge for the government and a key issue for future economic support.

Kenya scraps tax breaks, fears protests

Kenyan lawmakers have turned down a Treasury Department proposal to scrap tax breaks on a range of goods and services citing concerns over inflation and dwindling investor confidence. They remain wary about tax changes after the government's push last year for more revenue sparked deadly protest. And first of all such as our chief Africa correspondent Dan walk us through exactly what the National Assembly vetoed and why they vetoed it. Yeah Jim on. This is significant especially if you take a look at the context of what we've seen from Kenya over the past year. So as you were just mentioning there we heard from lawmakers rejecting proposals by the Treasury to eliminate tax breaks and the tax breaks were on various goods and services. If we take a look at some of them from mobile phones to electric buses and bicycles there was also a removal proposal on preferential corporate income tax rate for local vehicle assemblers and affordable housing builders. So this is significant again for a number of reasons. If we take a look at what happened in Kenya last year we saw a deadly protest that claimed the lives of at least 60 people after much of it was around some of the proposals again for tax increases in a country that is already struggling with its own cost of living issues and also inflation. And so it seems like lawmakers are not wanting a repeat of that from those pictures that we're seeing there from last year. And what we actually heard in particular from the lawmakers is that they want consistent tax policy to enable investors to make informed long term decisions without the disruption of frequent legislative changes. But still again this is an economy that does need to find some way of shoring up some revenue especially because they abandoned their IMF program earlier in March. And so they really are in an economic situation here where they need to figure out how to move forward. But at this point right now lawmakers not seeming like they want to eliminate at least tax breaks and put that burden on consumers at this point in time. Yeah. And let's talk about corruption in Kenya. IMF team has just landed in Kenya to assess the corruption hurdles. How serious of a problem is that. This again ties to the bigger broader issue that we're seeing in Kenya. Kenya ranks at one hundred and twenty one of one hundred and eighty countries globally on a corruption index. And again part of the issues that we did hear from many protesters last year is that they were concerned that President Ruto who campaigned on wanting to crack down on corruption had not been able to do that. We've also heard issues and concerns from human rights groups about corruption within the police force and other forms of government. And so this IMF team is now in the country to try and assess what potentially where potentially the country stands and what can be done or instituted in order for them to move forward. And this is not just an exercise where they are trying to figure out broadly where they're at. This is also again part of Kenya's hopeful. Hopefully they they want to get to a point where they can get back into an IMF program but they need to tackle some of these issues that the fund sees as key.

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