‘No tax relief yet,’ David Ndii hints at tougher times ahead for Kenyans.

President William Ruto’s Senior Economic Advisor, David Ndii, has dismissed the possibility of imminent tax cuts, suggesting that the government’s fiscal challenges make such relief unlikely for Kenyans in the near future.

Speaking at the NCBA Economic Forum in Nairobi on Wednesday, Ndii highlighted that as long as Kenya remains under an International Monetary Fund (IMF) program, reducing taxes will be out of reach. “When you are in an IMF program, you are in receivership. There is no relief; you only get relief when you come out of receivership,” he said, adding that the situation is comparable to a business in financial receivership, where cost-cutting and layoffs are necessary to stabilize.

Ndii, who chairs the Council of Economic Advisors, underscored the need for structural economic reforms rather than temporary tax relief, warning against cycles of crisis. “What you want to do is address the structural issues we are tackling instead of returning to the question of how much relief we can provide,” he added.

Despite these constraints, Ndii assured that the government is working on distributing the tax burden more fairly, noting that the current system places a disproportionate load on salaried Kenyans.

His comments come as the government reintroduces key aspects of the Finance Bill, 2024, with the goal of raising Ksh.174 billion. The Treasury will table three new bills—the Tax Laws (Amendment) Bill, 2024; Tax Procedures (Amendment) Bill, 2024; and Public Finance Management (Amendment) Bill, 2024—in Parliament.

Unlike previous instances where tax bills were presented with minimal public explanation, the Treasury has taken steps to publish a detailed two-page summary in local dailies to clarify the proposals, a move reflecting lessons learned from public pushback against the Finance Bill 2024.

While the proposed tax hikes aim to bolster economic stability, they risk further unrest from a public already burdened by the high cost of living. Treasury Cabinet Secretary John Mbadi remains optimistic, however, asserting that the new bills will foster economic growth and close the fiscal gap through enhanced revenue collection.

As these tax measures advance, the government faces the challenge of balancing fiscal responsibility with public concerns over mounting economic pressures.

Article By Suzy Nyongesa.