The Kenyan government has scrapped a number of proposed taxes in this year’s controversial financing bill following public outcry.
The announcement by MPs came as police fired tear gas and used water cannon in an attempt to disperse angry protesters in the capital Nairobi.
The parliamentary finance committee has scrapped a 16 percent levy on bread, as well as higher taxes on cooking oil and mobile money services.
Since taking office in 2022, he has been president William Ruto has introduced several new and unpopular taxes with the aim of eliminating the country’s public debt of almost $80 billion (£63 billion).
But critics of the latest proposals fear they will stifle economic growth and lead to job losses.
The U-turn on the new finance bill was announced by Parliamentary Finance Committee Chairman Kuria Kimani at a press conference attended by President Ruto and other lawmakers in the ruling coalition.
His finance team has been gathering public opinion on the bill and he said the decision to drop some proposals was taken to protect Kenyans from the rising cost of living.
Other proposed taxes that have been eliminated include a tax on motor vehicles, which critics said would also have hit the insurance industry.
Mr Kimani also announced a rollback of a proposed eco-tax that targeted products considered to have a negative impact on the environment, such as packaging, plastics and tires.
It faced a backlash with many claiming it would increase the cost of key goods such as diapers, sanitary napkins, computers and mobile phones.
The levy would now only apply to imported goods, Kimani said.
Mr Ruto did not speak or respond during the briefing but the move, which was seen as bowing to public pressure, will be a blow to his government.
He recently urged Kenyans to accept more taxes, arguing that they were in fact undertaxed, but acknowledged this would be difficult.
Taxes on salaries, fuel and gross sales have increased over the past two years.
A housing levy of 1.5% of a worker’s monthly wage has also been introduced, which is intended for the construction of affordable houses.
A new higher health insurance levy will also come into effect soon.
Lawmakers will discuss the funding bill on Wednesday, which is why protests are taking place in the capital.
Police have arrested several people suspected of organizing the demonstrations.
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