(3 Minutes Read)
Despite retracting the tax hikes, the road maintenance levy was increased to 25 per litre of fuel from 18 shillings.
Kenya plans to reduce its 2024-25 spending by 1.9% and widen the fiscal deficit to 3.6% of GDP, following the rollback of tax hikes due to protests. President William Ruto dismissed nearly his entire cabinet and promised a more inclusive government.
To address a USD 2.7 billion budget gap caused by the withdrawn tax hikes, Ruto proposed spending cuts and additional borrowing. Next week, lawmakers will debate the supplementary budget, which outlines a total spending of 3.87 trillion Kenyan shillings (USD 30 billion), down from 3.99 trillion. Recurrent expenditure is set to drop by 2.1% and development expenditure by 16.4%. Despite retracting the tax hikes, the road maintenance levy was increased to 25 per litre of fuel from 18 shillings.
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https://trendsnafrica.com/kenya-stares-at-wider-debt-burden-upon-abandoning-tax-reforms/
Ruto faces pressure from international lenders like the IMF to cut deficits while managing a population struggling with high living costs. The IMF is assessing Kenya’s recent developments and will adjust its approach accordingly.
