President William Ruto of Kenya, humorously dubbed “Zakayo” after the biblical figure Zacchaeus, is grappling with public discontent due to a series of new taxes introduced since his election in August 2022.
Critics argue that these tax measures, along with increased existing ones, contradict Ruto’s promise to champion the interests of struggling individuals, known as “hustlers.” Ruto, acknowledging the public’s displeasure, justified the tax hikes as essential sacrifices to curb government borrowing and reduce the soaring national debt, currently standing at 10 trillion shillings ($65 billion).
Despite Ruto’s defense, many Kenyans claim that the taxes predominantly fund government extravagance rather than improving public services. Concerns were heightened when the Controller of Budget raised alarms about high taxes amid perceived “wasteful” government spending, especially on domestic and international travel by officials.
Ruto, who has undertaken over 40 foreign trips in a year, defends his travels as efforts to attract foreign investments and job opportunities for Kenyans. However, amidst rising operational costs, the closure of businesses, and the loss of 70,000 private-sector jobs in the past year, the Federation of Kenyan Employers warns of further job losses.
Businessmen, dissatisfied with the government’s response, call for a tax review. Economist Ken Gichinga argues that heavy taxation on job-creating companies is deterring business and prompting some firms to relocate, exacerbating the informalisation of businesses.
Small business owners, feeling the tax burden, complain about the conduct of tax collectors, describing it as bordering on harassment. Recent paramilitary-style visits by the Kenya Revenue Authority (KRA) have instilled fear among businesspeople, leading to concerns about increased efforts to hide transactions and evade taxes.
The impact of tax hikes is evident in sectors like LPG gas distribution, where businesses have downsized due to reduced consumer spending. The tourism sector also faces challenges, with higher taxes contributing to declining tourist numbers and dissatisfaction among industry players.
While KRA reports maintaining revenue growth, it falls below annual targets, attributed to reduced demand for imports, increased lending rates, and reduced bank profitability. The Treasury Minister’s acknowledgment of financial difficulties affecting civil servant salaries and constituency projects paints a bleak picture of the country’s economic landscape.
As discontent grows, Kenyans hope for relief from President Ruto, drawing parallels with the biblical Zacchaeus, who eventually descended from a tree after a transformative encounter with Jesus.