IMF Tells Ruto What to Do Instead of Increasing Taxes on Kenyans

The International Monetary Fund (IMF) has urged President William Ruto’s government to rethink its approach to taxation, warning that increasing tax rates may not be the best way to raise more revenue as Kenya struggles with mounting public debt and the rising cost of living.

In a fresh recommendation, the international lender has advised Kenya to broaden its tax base instead of placing additional tax pressure on individuals and businesses already struggling with the high cost of living.

Speaking during a scheduled briefing in Washington, IMF Communications Director Julie Kozack said Kenya was facing significant fiscal and debt-related challenges that required a balanced approach to address.

She explained that the government should focus on ensuring that everyone who is legally required to pay taxes does so. This includes reducing unnecessary tax exemptions and strengthening tax compliance to improve revenue collection.

The IMF also called for greater transparency in government spending and more targeted social protection programmes to protect vulnerable households from the effects of economic difficulties.

The recommendation comes as the Ruto administration faces growing pressure over taxation, government borrowing and the cost of essential goods and services.

According to the latest economic figures, Kenya’s annual inflation rose to 7.3 per cent in October 2026, up from 6.8 per cent in September. Rising prices of transport, food, housing and fuel have continued to put pressure on household budgets.

Kenya’s public debt has also increased significantly, with debt servicing taking up a large share of government revenue and leaving fewer resources for development projects and public services.

The IMF’s latest position comes two years after the controversial Finance Bill 2024 sparked nationwide protests that forced President Ruto to withdraw the proposals.

Meanwhile, discussions between Kenya and the IMF over a possible new financial programme are expected to feature during the fund’s planned visit to Nairobi in early December.

The country’s previous $3.6 billion IMF-supported programme expired in April 2025 without the release of its final tranche.

With the 2027 General Election approaching, the government faces the challenge of raising enough revenue to finance public spending while addressing concerns over taxes and the rising cost of living.

source;https://x.com/StandardKenya/status/2117112010722644411?a=lNW8jUwicbOswfY1pmQ&s=20