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Human Rights Watch, a global NGO dedicated to advocating for human rights, has proposed measures for the Kenyan government to boost revenue progressively and stabilize the economy. In a statement released on Tuesday, the organization suggested alternative strategies for President William Ruto’s administration to consider, rather than relying on additional loans from the International Monetary Fund (IMF) or the World Bank.
These financial institutions have been criticized for imposing stringent conditions on borrowing countries, which often exacerbate economic pressures on the middle and low-income populations. Human Rights Watch recommended several actions for increasing revenue without further borrowing:
- Tax Reforms: The administration should enforce existing tax laws more rigorously to combat tax avoidance and evasion, particularly among high-level officials. Tax avoidance involves legally exploiting loopholes to reduce tax liabilities, whereas tax evasion is the illegal act of avoiding tax payments.
- Addressing Illicit Financial Flows: According to a report by the United Nations Committee on Economic, Social and Cultural Rights, Kenya experiences significant illicit financial flows and tax avoidance cases that remain insufficiently investigated. The Kenya Revenue Authority (KRA) has also reported that over 1,309 individuals and companies engaged in tax evasion schemes, resulting in a loss of Ksh.259 billion.
- Combating Mismanagement and Corruption: Ensuring that revenue is spent appropriately requires closing loopholes related to mismanagement and corruption. This measure aligns with calls from Gen Z protestors, who have criticized government officials for their lavish lifestyles amid rising living costs.
- Increasing Taxes on the Wealthy: Raising taxes on wealthy individuals and corporations could provide additional revenue. The Tax Justice Network estimates that Kenya loses Ksh.24 billion annually due to global tax abuse, primarily by multinational corporations owned by affluent individuals.
Human Rights Watch also urged the Kenyan government to critically evaluate the conditions set by IMF programs to ensure they do not infringe upon human rights. “Economic sustainability can only be achieved with a new social contract that raises revenues fairly, manages them responsibly, and funds services and programs that allow everyone to realize their rights,” stated Sarah Saadoun, Senior Researcher on Poverty and Inequality at Human Rights Watch.
President Ruto had announced plans to cut Ksh.180 billion in expenditures and borrow Ksh.169 billion to compensate for the shortfall caused by the withdrawal of the Finance Bill 2024, which was abandoned in response to public pressure. Human Rights Watch emphasized that the IMF should reassess its targets to ensure that they do not hinder the Kenyan government’s ability to meet its human rights obligations and that policies do not worsen poverty, inequality, or undermine rights.
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