The International Monetary Fund (IMF) has absolved itself of blame in the aggressive push for new taxes through the failed Finance Bill 2024 in Kenya, insisting the revenue measures are a design of the government.
Visiting IMF deputy managing director Nigel Clarke said the fund had only offered its advise on measures to help Kenya achieve fiscal consolidation and macro stability, while leaving specific tax measures to the authorities.
“Specific revenue measures are not a design of the IMF. The choices made are totally in the purview of the government. I understand some of the misconceptions that exist. At the end of the day, specific policy choices, in particular revenue choices, are made by Kenyan authorities taking into consideration what is socially and politically feasible,” Mr Clarke said on Tuesday.
“The IMF provides directional advice that is designed to assist in the attainment and maintenance of fiscal and external sustainability. In the process of providing advice, we always ensure a range of options is discussed and put on the table,” he added.
Mr Clarke’s comments come against the backdrop of the public discourse against new tax measures represented by the Finance Bill, 2024, which were seen to largely have IMF’s fingerprints.
President William Ruto refused to assent to the Finance Bill 2024 following violent protests against the proposed tax law.
Mr Clarke, who took over as the second deputy managing director of the IMF on October 31, has been on a two-day working visit to Kenya and has met President Ruto, Central Bank of Kenya Governor Kamau Thugge and Treasury Cabinet Secretary John Mbadi and his Principal Secretary Chris Kiptoo.
The visiting IMF official said that his visit to Kenya would provide lessons for future engagements with the country through discussions with various groups, including the civil society.
However, he insists that the tour is organic and not forced by the events of June 2024 which ended in deadly street protests and the abandonment of proposed tax measures in totality.
“The Kenyan programme is of extreme importance to the IMF and it is one of our largest programmes anywhere in the world,” he added.
“We are on the side of the Kenyan people in desiring macro-economic stability and stability in the external environment, fiscal and debt. What we seek to do is advice on policy approaches that are best suited to achieve and maintain those outcomes,” Mr Clarke said.
Kenya and the IMF have been engaged in a multi-year programme since April 2021, aimed at instilling fiscal consolidation and anchoring structural reforms.
Last month, the fund completed the seventh and eighth reviews of the programme disbursing Sh78.3 billion ($606.1 million).
