Kenya's taxman targets artificial nails, cryptocurrencies, and more to boost government revenue
Business

Kenya’s taxman targets artificial nails, cryptocurrencies, and more to boost government revenue

Kenya’s tax authorities are implementing new proposals to generate revenue for President William Ruto’s financially strained government.

These measures target various sectors, including artificial nails, cryptocurrencies, spaghetti, and social media influencers.

Ruto aims to address the country’s heavily indebted economy inherited from his predecessor, Uhuru Kenyatta, who relied on borrowing to fund extensive infrastructure projects.

Despite his promises to uplift impoverished Kenyans during the election campaign, Ruto is now resorting to politically unpopular tax hikes. The proposed budget for 2023/24 amounts to 3.6 trillion shillings ($26.2 billion), with the new taxes expected to generate 289 billion shillings.

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Critics argue that these measures will disproportionately affect small businesses, which form the backbone of the economy, as well as households already struggling with soaring prices and deep-seated poverty.

The hairdressing industry is one of the sectors directly impacted. Rebecca Nyalesa, a 45-year-old hairdresser, expresses concern about the already challenging economic conditions and fears that the proposed taxes on beauty products, such as wigs and false eyelashes, will further harm her business.

Kenya’s economy has been adversely affected by regional drought and the aftermath of the Ukraine war, leading to high inflation and declining GDP growth.

The country also faces a daunting $70 billion debt burden, which has prompted credit rating agencies like Moody’s to downgrade Kenya’s sovereign debt rating.

Ruto justifies these tax measures as necessary for steering the economy and government finances back on track, aligning with the International Monetary Fund’s calls for reforms.

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However, opposition leader Raila Odinga views these taxes as a burden on Kenyans and threatens to mobilize social sectors for political actions to counter them.

The finance bill is open for public comment until May 20 and will require presidential approval to become law.