Treasury CS Ukur Yatani was thrown back to the drawing board after MPs rejected new tax proposals.
The lawmakers shot down the CS plan to tax bread, motorcycle purchases, and flour. The MPs further rejected the Digital Service Tax (DST) which was to be imposed on digital services offered in Kenya.
Yatani's proposal to reintroduce the 20 percent excise duty on betting was also amended, with MPs cutting it down to 7.5 percent.
“As much as we want to raise funds to finance our budget, we should be livid about the fact that Kenyans are already struggling,” Homa Bay Woman Representative and Chairperson of the National Assembly Committee on Finance and National Planning, Gladys Wanga stated.
Yatani was reportedly shocked by the MPs' decision as he wondered how he would raise money to finance his Ksh3.6 trillion 2021/22 budget.
He held a crisis meeting on Wednesday, June 23, at the Treasury Building to contemplate his next move.
In attendance were three MPs who are members of the National Assembly Committee on Finance and National Planning which shot down his proposals.
"The CS panicked over what transpired on the floor of the House on Tuesday as he wondered how he was going to raise the money to finance the budget," a source told Nation.
Yatani allegedly pleaded with the MPs to revise their decision and support his proposals, but they declined, arguing that they wouldn't subject Kenyans to more taxes.
The CS is facing a Ksh929 billion deficit and is keen on borrowing more loans to raise the amount. Kenya has already secured loans from the World Bank and the International Monetary Fund (IMF) and is seeking another Eurobond loan.
In February 2021, President Uhuru Kenyatta stated that he would not relent in pushing Kenyans to pay taxes. The head of state argued that his government was racing against time to finance development projects.
"I will not lower taxes. You will have to pay because there is no other way we can build facilities, roads, and schools. We must pay taxes.
"The only thing we can do is paying taxes," Uhuru declared.
