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‘People Who Are Salaried Are Crying’: Taxes on Workers Add to Debt Misery

The New York Times's profile
The New York Times
4h ago

Kenya is experiencing significant financial strain as increased payroll taxes and other levies are implemented in an effort to manage the country's daunting $80 billion debt. President William Ruto's administration has increased taxes on goods and services, creating a heavy burden on the salaried workforce while a large portion of the population remains untaxed. The economic crisis has devalued the Kenyan shilling, exacerbating the cost of imports and diminishing purchasing power. Despite these measures, public dissatisfaction is fueled by the lack of visible improvements in public services and ongoing issues with corruption and fiscal mismanagement. The government is in talks with the International Monetary Fund for a new loan package, yet public sentiment remains skeptical about future solutions and potential further unrest looms as tax burdens increase without corresponding benefits in public infrastructure and services.

‘People Who Are Salaried Are Crying’: Taxes on Workers Add to Debt Misery

Kenya's government, led by President William Ruto, has raised payroll taxes and other levies as part of a strategy to address the country's $80 billion debt, significantly reducing take-home pay for the salaried workforce.

Increased taxes include excise duties on sugar, alcohol, and plastics, higher import taxes on essentials, and doubled taxes on business profits, resulting in widespread financial strain among citizens.

The economic crisis has led to a depreciation of the Kenyan shilling, making imports more expensive and further reducing the purchasing power of Kenyan citizens, who already face high poverty and unemployment rates.

Public discontent is exacerbated by a perceived lack of improvement in public services, with citizens expressing frustration over corruption and mismanagement in government spending, including unaccounted funds and undelivered goods.

Negotiations with the International Monetary Fund for financial assistance indicate potential for further austerity measures, although public trust in the government's ability to manage finances and provide essential services remains low.

Proposed tax hikes previously led to deadly riots, and as the government prepares a new budget, there is concern about renewed unrest as citizens protest the increasing tax burden and lack of tangible public benefits.

The burden of taxation falls heavily on a small segment of the population, as the majority of workers are employed in sectors that evade tax collection, highlighting the need for a broader tax base to stabilize the economy.

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