(Bloomberg) -- One person was killed and dozens more injured in a police crackdown on Kenyan protests against proposed tax hikes as the country braces for more marches next week when lawmakers take a final vote on the controversial levies.

The death was “allegedly as a result of police shooting” on Thursday, the Independent Policing Oversight Authority said in a statement. About 39 people were injured in the protests, which took place in a dozen cities across Kenya on Tuesday and Thursday, according to the Kenya Red Cross.

Countrywide marches are planned for this coming Tuesday to coincide with a vote in parliament on the Finance Bill 2024, which seeks to raise as much as $2.4 billion by taxing everything from sanitary pads to bread. In a preliminary vote on Thursday, ruling party lawmakers backed the bill — any changes are likely to be introduced at next week’s sitting. 

As protests kicked off earlier this week, President William Ruto pledged to review some of the planned taxes on bread, motor vehicles, mobile money transfers and banking services. The marches have since grown bigger and spread to at least 10 other major towns, with protesters calling for the entire bill to be withdrawn.

Police responded by deploying teargas, water canons and in some cases live bullets against demonstrators mostly in their 20s and 30s.

Social Opposition

Ruto is banking on the aggressive tax measures to grow revenue by a fifth to a record 2.92 trillion shillings ($22.7 billion) in the year beginning July. The set of controversial taxes are expected to generate 302 billion shillings and help the government achieve its lowest budget deficit in 15 years at 3.3% of GDP from an estimated 5.7% in the current period.

Narrowing the fiscal gap “will be challenging given social opposition,” Fitch Ratings said in a research note published Thursday. Revenue collection will likely fall short, consistent with Kenya’s record of missed targets in past years. 

“Faced with significant public opposition, the government’s capacity to increase tax rates or introduce new taxes is constrained, leaving it to focus primarily on enhancing tax revenue through administrative tax efficiency measures,” according to the ratings company.

The shilling was little changed against the dollar by 1:50 p.m. local time. Dollar bonds due 2032 gained 6 basis points to 10.427%, while those maturing 2028 dropped 2 basis points to 10.112%.

Market reaction has been muted as investors await the outcome of Tuesday’s vote by lawmakers, according to Ronny Chokaa, a senior research analyst at AIB-AXYS Africa.

The government is likely to “compromise on a few line items, so that may lead to a fiscal slippage on that end,” Chokaa said. 

--With assistance from Eric Ombok.

(Updates with muted market reaction from ninth paragraph)

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