At least 200 people were injured and more than 100 arrested across Kenya in Thursday's nationwide protests against government plans to raise $2.7 billion in additional taxes, an alliance of rights groups said.

Police fired tear gas and water cannons to disperse protesters in the capital Nairobi, the five rights groups, which include Amnesty International and the Kenya Medical Association, said in a joint statement late on Thursday.

The presence of spent cartridges implied the use of live rounds, they said. One person died from a gunshot wound sustained in the Nairobi protest, the Daily Nation newspaper reported.

The Nairobi county police commander, Adamson Bungei, did not answer his phone to respond to the reported killing, injuries, and arrests.

"We commend the several thousands of protesters, many of whom are youthful, for picketing peacefully (and) exhibiting restraint and decorum despite provocation by police," the group said.

Protesters want the government to completely abandon the finance bill, saying it will choke the economy and raise the cost of living for Kenyans who are already struggling to make ends meet.

The International Monetary Fund says, however, that the government needs to increase revenues to reduce the budget deficit and state borrowing.

Earlier this week the government softened its position a little, with President William Ruto endorsing recommendations to scrap some of the new levies, including on car ownership, bread, cooking oil and financial transactions.

Despite the widespread demonstrations, which broke out in 19 of Kenya's 47 counties, lawmakers passed the finance bill in its second reading on Thursday, moving the contested tax proposals to their next stage for approval.

Lawmakers are expected to meet on Tuesday to vote on the proposed changes to the bill, which parliament's budget committee says would blow a Ksh200 billion ($1.56 billion) hole in the 2024/25 budget, and compel the government to make spending cuts.