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Ruto’s taxes: Mass protests and violent repression in Kenya

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Picture: Dai Kurokawa / EPA – A supporter of opposition leader Raila Odinga holds rocks behind his back during a protest after Odinga rejected the result of the presidential election in Kenya. At least 12 people have been killed and hundreds arrested in mass protests that have been rocking Kenya for over a week. But ‘leaders from the ruling class, be it Ruto or Odinga, always look outward to the West to find solutions’ – Odinga is not necessarily a better alternative to Ruto, the writer says.

By Pavan Kulkarni

Six more protesters were killed and over 300 arrested on Wednesday, July 12, in a crackdown on a fresh round of country-wide protests in Kenya against the IMF-backed tax hikes that are worsening the already unfolding cost-of-living crisis.

At least six others were killed earlier on July 7, when the protests first broke out against the new taxes, introduced as part of President William Ruto’s Finance Act 2023, which has been praised by the US for the opportunities it opens up for its capital to operate in Kenya.

“More than a thousand were detained and held in Nairobi’s satellite police stations that day. They were released after 6 p.m. But 75 protesters were arrested and held for two nights in Nairobi’s Central Police Station, which is infamous for disappearing student activists,” said Booker Ngesa Omole, national vice chairperson and national organising secretary of the Communist Party of Kenya (CPK).

Thirty-seven CPK members, including its chairperson, Kinuthia Ndung’u, were among the 75 arrested. “We went to the station to demand their release on July 8. But the police teargassed everyone, including the senior lawyers and ex-Chief Justice Willy Mutunga who was accompanying us,” Omole told Peoples Dispatch.

The arrested protesters were finally released on a free bond on Sunday, July 9, requiring them to appear in court the following day. At the court, however, they were let go without charges after the director of public prosecution informed the police on perusing the files that no case could be made out as the arrested protesters had not committed any offence, Omole explained.

On July 11, the Police Inspector General’s office issued a statement warning that it will “take necessary measures to disperse all illegal demonstrations,” including the country-wide protests that had been planned again on July 12.

“We know at least two policemen were also killed on July 7,” Omole claimed. In the clashes that ensued after police used force to disperse the demonstrations on July 12, “more policemen than civilians died”, he said, adding that “the police do not want to admit it”.

“It is not necessarily the opposition strongholds where the police have suffered most casualties,” he explained. Forces had been redeployed from areas which had voted for President William Ruto in the last year’s election in a large majority to opposition strongholds. When the residents in areas thought to be strongly in support of the government “rose up in protest, the small contingents of police left behind here were outnumbered”. “Their stations were attacked.”

Explaining this outburst of anger, Omole said that people had voted for Ruto hoping he would be more sympathetic to their deprivation since he is an outsider, and not another member from the handful of families who have been ruling Kenya in turns for most part since independence. “But ten months into his administration, they have been disillusioned,” with the government’s new taxes jacking up the prices of basic commodities further while eating into their incomes, he said.

In the meantime, the legality of the new taxes that the government has been collecting since July 1, as envisaged in the Act, is being increasingly contested. On June 30, a day before the Act was to take effect, the Milimani High Court temporarily suspended its implementation on the grounds that the procedural requirements for passing a finance bill through the parliament was not met. Subsequently, on July 10, the Milimani High Court refused the government’s appeal to lift the temporary suspension, extending it indefinitely.

However, the June 30 verdict did not stop the government from doubling the VAT on fuel on July 1 from 8 percent to 16 percent – a measure the IMF had been pressurising Kenya to implement at least since 2021. The increases in taxes was a key component of the Act that had been opposed across sections.

Fuel prices in Kenya had already reached a historic high after Ruto’s government lifted subsidies at the insistence of the IMF. With the doubling of VAT, taxes now amount to 40 percent of the cost per litre, which has reached a 12-year high.

“Because of the rising fuel prices, all prices seem to be going up – the cost of transport, food, everything. It has affected the basic prices of commodities in a very significant way,” Omole said.

While the government claims it only wants to subsidise production, and not consumption, its tax on fuel, used for production across the sectors, is in fact “promoting deindustrialisation,” argued Omole. “It will make domestic production costlier and uncompetitive and make way for imported goods to flood the market.”

Tax on sugar and maize flour is further increasing the price of staple good items. “Two kilos of maize in rural areas is now selling at 200 (Kenyan) shillings (about R26), while it usually costs 60 shillings (about R8),” he added.

Affordable Housing?

The Act also includes another 1.5 percent tax, reduced from the originally proposed 3 percent, imposed as a housing levy on all employees and employers. “There is already a national housing corporation that has been budgeted for. But President Ruto has created this levy for public-private partnership, in which the public money will be given to private contractors to construct houses, each of which will cost about three million (Kenyan) shillings (more than US$21,216),” Omole said.

“They call this affordable housing, but 74 percent of Nairobi’s residents live in slums on less than a dollar a day. Only businessmen and others who can access loans can buy those so-called affordable houses, and rent it to the workers to make money from it. 90 percent of the people will not be able to afford to buy it,” he explained.

“We have been calling on the government to increase corporate tax if it really intends to help the poor. Unfortunately, they have only increased the corporate tax on the local small and medium enterprises. But the large multinationals in the Special Economic Zones have a tax holiday for 10 years. Most of the tax breaks and exemptions have gone to foreign investors.”

The CPK has also been demanding a “Land Tax on billionaires hoarding millions of tracts of land. The three biggest landowners in Kenya are from the two former ruling families – Jomo Kenyatta’s family and Daniel Moi’s family.”

Even while disparaging these families as “dynasties with old money”, Ruto doesn’t want to tax them, Omole said. The burden of what was introduced instead as a landlord tax on house owners has been promptly shifted on to the tenants, who will be paying higher rents from this month to make up for this additional tax, he explained.

Ruto’s policies have been received warmly by the US and the IMF. However, the massive protests in Kenya have made evident the groundswell of anger against the new tax regime.

Opposition leader, Raila Odinga, who lost to Ruto in the presidential race by a narrow margin last year, has emerged as the figurehead of the protests, having given the call for mobilisations on both July 7 and 12. However, Odinga too has no vision for an alternative economic policy, cautioned Omole.

Unlike Ruto, who is “a greedy thug” with a history of participating in the dictatorship of Daniel Moi, “Odinga had courted several arrests while protesting against the dictatorship,” said Omole. “He also has the legacy of his father Jaramogi Odinga, who was a progressive nationalist. He therefore commands a certain loyalty from a considerable section of the Kenyan population.

“But he himself has often played opportunist politics. When his confrontation with President Ruto started, Ruto was appealing to Washington to sanction Odinga, while Odinga was calling on the Commonwealth to sanction the president,” he recalled.

“A particularity of the leaders from the ruling class, be it Ruto or Odinga, is that they always look outward to the West to find solutions. They are conditioned to think that way,” Omole added, stressing the need to build peoples’ movements independent of the leaders and political parties of the ruling class.

Pavan Kulkarni is a journalist with Peoples Dispatch who covers labour struggles and progressive social movements, mainly on the African continent, but also in India.

This article was first published on Peoples Dispatch