One person was killed and at least 200 people injured across Kenya in Thursday's nationwide protests against government plans to raise $2.7-billion in additional taxes, an alliance of rights groups and the police watchdog 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, adding that more than 100 protesters had been arrested across Kenya.

The Independent Policing Oversight Authority (IPOA) said on Friday it had documented the death of a man "allegedly as a result of police shooting and several serious injuries suffered by other demonstrators including police officers."

The 29-year-old man died during treatment to a wound on his thigh at a hospital on Thursday night, according to a police report seen by Reuters. The report did not state how he was injured.

Nairobi county police commander Adamson Bungei did not answer phone calls.

"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 rights groups said.

Protesters want the government to completely abandon its 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, however, says 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 200-billion Kenyan shilling ($1.56-billion) hole in the 2024/25 budget, and compel the government to make spending cuts.