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{
    "id": 804885,
    "url": "http://info.mzalendo.com/api/v0.1/hansard/entries/804885/?format=api",
    "text_counter": 163,
    "type": "speech",
    "speaker_name": "Mr. Henry Rotich",
    "speaker_title": "The Cabinet Secretary for the National Treasury",
    "speaker": {
        "id": 13142,
        "legal_name": "Henry Rotich",
        "slug": "henry-rotich"
    },
    "content": "However, during the public consultations on the Bill, members of the public raised concerns on these proposals and were of the view that the higher rates are not appropriate at this time. We have considered these concerns and resolved to revert to the rates contained in the current Income Tax Act. We are finalising the draft Bill then seek approval from the Cabinet before submission to this House by end of July 2018. I propose to make limited amendments to the Income Tax Act with a view to addressing critical issues on revenue gaps and to expand the tax base. The informal sector in our economy is expansive and remains out of the tax net. The Finance Act, 2006, introduced taxation of the sector through a turnover tax. However, this system of taxation has largely been unsuccessful and the levels of compliance have remained low due to the profile of the sector. I propose to amend the Income Tax Act to replace the turnover tax with presumptive tax based on the business permit or trading license fees at a rate of 15 per cent in order to ensure that the sector contributes towards the economic agenda of the country. In the Tax Laws (Amendment) Bill, 2018, I had proposed to introduce withholding tax on winnings. However, the proposal did not provide how the revenue realised from this measure will be applied. I propose to amend the Income Tax Act to clarify that the revenue realised from the taxes on winnings shall be used for the development of sports, arts, cultural activities for the youth, as well as critical social development initiatives including universal healthcare. The Port of Mombasa is the gateway to East and Central Africa and is one of the busiest ports along the East African coastline. The port provides direct connectivity to over 80 ports worldwide, attracting various service providers, particularly shipping lines. Under the current legislative framework, payments for such services which represent income from Kenya are not subject to tax. This creates an unfair playing field for residents of Kenya whose income from similar sources are subject to tax. I, therefore, propose to amend the Income Tax Act to subject payments for demurrage charges made to non-resident persons to withholding tax at a rate of 20 per cent. Kenya represents one of Africa’s most well-developed and best-regulated insurance markets. General insurance is about twice the life insurance penetration and the assets have grown over time. Some streams of income from this sector, including payments to non-resident persons and capital gains made by general insurance companies are not taxed under the current legal framework. I propose to introduce Capital Gains Tax on transfer of property by general insurance companies. In addition, I propose to amend the Income Tax Act to introduce 5 per cent The electronic version of the Official Hansard Report is for information purposes only. Acertified version of this Report can be obtained from the Hansard Editor."
}