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"id": 1554322,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1554322/?format=api",
"text_counter": 176,
"type": "speech",
"speaker_name": "Kikuyu, UDA",
"speaker_title": "Hon. Kimani Ichung’wah",
"speaker": null,
"content": " The Chairman of the Departmental Committee on Finance and National Planning, Hon. Kuria Kimani, is the son of Kimani. But not this Kimani."
},
{
"id": 1554323,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1554323/?format=api",
"text_counter": 177,
"type": "speech",
"speaker_name": "Hon. David Ochieng’",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Hon. Kuria Kimani, you can speak for yourself on this matter."
},
{
"id": 1554324,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1554324/?format=api",
"text_counter": 178,
"type": "speech",
"speaker_name": "Molo, UDA",
"speaker_title": "Hon. Kuria Kimani",
"speaker": null,
"content": " Thank you, Hon. Temporary Speaker. Thank you, our very able Leader of the Majority Party, for moving the Excise Duty (Amendment) Bill. My name has an interesting story. Kimani is not my father. I am a child of a single mother called Lucy Nduta. But I was named after my grandfather, Francis Kuria Kimani. I used to call myself Francis Kuria Nduta. I was the only pupil in the school with a female surname. So, when it came to registering for my KCPE, I used the name of my grandfather, for whom I was named. So, whether you call me Kimani Kuria or Kuria Kimani, it does not really matter because I am not a son of Kimani anyway."
},
{
"id": 1554325,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1554325/?format=api",
"text_counter": 179,
"type": "speech",
"speaker_name": "Hon. David Ochieng’",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Maybe Hon. Kimani wanted to claim some credit. So, your Christian name is Francis?"
},
{
"id": 1554326,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1554326/?format=api",
"text_counter": 180,
"type": "speech",
"speaker_name": "Molo, UDA",
"speaker_title": "Hon. Kuria Kimani",
"speaker": null,
"content": " My Christian name is Francis."
},
{
"id": 1554327,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1554327/?format=api",
"text_counter": 181,
"type": "speech",
"speaker_name": "Hon. David Ochieng’",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Okay. Go ahead."
},
{
"id": 1554328,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1554328/?format=api",
"text_counter": 182,
"type": "speech",
"speaker_name": "Molo, UDA",
"speaker_title": "Hon. Kuria Kimani",
"speaker": null,
"content": " My name is Francis Kuria Kimani. So, you can call me Kuria Kimani or wa Nduta. I want to take this chance to pay tribute to that great man, my grandfather, who brought me up and educated me. He sold everything he had to make sure I had the best education he could afford. Unfortunately, he died during COVID-19. May his soul rest in eternal peace. In December 2024, this House processed the Tax Laws (Amendment) Act 2024, which introduced a 25 per cent excise duty on imported, fully assembled electric transformers while exempting locally assembled and manufactured transformers from excise duty, with the The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1554329,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1554329/?format=api",
"text_counter": 183,
"type": "speech",
"speaker_name": "Molo, UDA",
"speaker_title": "Hon. Kuria Kimani",
"speaker": null,
"content": "intention of protecting and promoting local manufacturing. However, it was later observed that the intended objective of the amendment was not achieved as the local industry still does not possess enough capacity to manufacture enough transformers to meet the country’s demand. Secondly, the entities classified as local manufacturers are, in reality, more of assemblers than manufacturers of all the units of a transformer. Kenya operates under the East African Common Custom External Tariff Regime as a member State of the East African Community (EAC). Under this regime, fully assembled transformers and their parts fall under the same tariff code. Consequently, the imported parts required for local assembly are also subjected to 25 per cent excise duty. This has led to a general increase in the cost of transformers across the board rather than reducing the cost of locally assembled units as originally intended. To explain in simple language, EAC tariffs, the ones we call harmonised system (HS) codes, whether for transformers or single units, are the same. By subjecting imported transformers to a 25 per cent Excise Duty meant even transformers assembled in Kenya were subject to the same excise duty. As a result, whether you manufacture transformers locally or import them, the unintended consequence of the amendment is that both would attract 25 per cent excise duty. This is the anomaly we seek to correct. Electricity penetration in Kenya is reported to be at around 78 per cent. This reflects both grid and off-grid solutions such as solar home systems. However, despite this impressive penetration rate, a substantial population is still not connected to the national grid. That is why government initiatives such as the Last Mile Connectivity and investments in renewable energy sources such as geothermal, hydro and solar are very crucial. For the Last Mile Connectivity to succeed, the cost of connection must be reduced. The cost of a transformer is therefore very key and essential. Transformers are essential components in the transmission and distribution of electricity. Every customer connected to a national grid relies on a transformer to receive the correct voltage and frequency of power. When a customer applies for electricity, they are either connected to an existing transformer or must fund the installation of a new one. The introduction of 25 per cent excise duty on transformers, as per the Tax Laws (Amendment) Act, 2024, has led to a direct impact of a 25 per cent increase in the cost of electricity. Many people in this House have witnessed two things. You may have a project somewhere, apply for power connectivity, and are given an invoice by Kenya Power for over Ksh1 million for a transformer. The other greater problem we have, even in our constituencies, is that transformers are connected to constituents only for them to be recalled for being faulty. You launch an electricity project and assure the people that they will have electricity. But a few days later, the transformer is faulty, and it takes so long to replace it. This amendment will make replacement easier. There is a probability that all transformers built in the country, just like any other product, could be faulty. When a fault occurs and the transformer was imported from China or India, it will probably have to be shipped back to that country. Alternatively, the particular faulty component will need to be imported again. When a transformer is locally assembled, it will be quicker to replace any faulty part. Second is the impact on electricity tariffs. Electricity pricing is regulated by the Energy and Petroleum Regulatory Authority (EPRA). It includes costs associated with generation, transmission, distribution and maintenance. As vital assets in the electricity network, transformers require regular replacement due to faults, wear and tear or vandalism. By increasing the cost of transformers, the 25 per cent excise duty raises the overall maintenance costs, which are ultimately transferred to consumers through higher tariffs. Third is the availability of transformers for use across the country. Kenya Power typically procures about 4,000 transformers annually, of which 3,200 are for replacing worn- The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1554330,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1554330/?format=api",
"text_counter": 184,
"type": "speech",
"speaker_name": "Molo, UDA",
"speaker_title": "Hon. Kuria Kimani",
"speaker": null,
"content": "out units, while 1,000 are for expanding the grid and connecting new customers. With the increased cost burden brought about by the amendment, fewer transformers can be procured within the current budgetary and cash flow constraints. This will likely result in delays in replacing faulty transformers, extended outages, increased insecurity, reduced economic activity and slower customer connections, especially in areas where a new transformer is a prerequisite. It is, therefore, evident that while the amendments introduced in the Tax Laws (Amendment) Act 2024 were well-intentioned and aimed at promoting local manufacturing, they have unfortunately resulted in unintended adverse outcomes. These include increased costs, operational challenges for utility providers and a negative impact on service delivery. It is imperative that we reconsider the application of excise duty on transformers to strike a balanced and effective approach. Such a review is critical in aligning the Government’s broader development agenda, particularly the Last Mile Connectivity. This flagship initiative seeks to expand electricity access to low-income households and rural communities by connecting those located within 600 meters of existing transformers. The success of this programme hinges on the availability and affordability of transformers. Therefore, the current taxation framework needs to be re-evaluated to ensure that it supports, rather than hinders, the realisation of this important national objective. Further, the Committee proposed an amendment to the First Schedule of the Excise Duty Act to correct an error in the classification of glass tariffs, especially float and safety glass. The current Act incorrectly references tariff code 7007 for imported float glass, whereas the correct classification under the Harmonized System is 7005. This miscalculation has led to confusion and unintended consequences, particularly affecting the transportation sector, which depends on accurately classified safety glass for compliance and public safety. Again, on this particular matter of float glass, the intended code was supposed to be 7007 for imported float glass. However, this House erroneously classified that code as 7005. Therefore, one of the additional amendments we will seek to do during the Committee of the whole House is to correct that unintended anomaly. The types of glass that you see around are of different kinds. The glass that is used in banks has safety features. We have glass used in motor vehicles and glass used in houses. They are all different kinds of glass. This classification will ensure that this House and the country prioritise support for local manufacturing rather than importation. No country has grown by being a supermarket; that is the unfortunate truth. We must all agree that as a country, we cannot grow if we become a supermarket of importation. The way to grow is to ensure that we support our local manufacturing by being very deliberate in promoting local manufacturing and making imported products that can be manufactured locally more expensive thus spurring economic growth. We have seen President Trump's administration slap tariffs on imported products. It is because they want to build America and ensure American companies succeed. We must do the same as a country. We must be selfish as a country and say, “Kenya first”. The only way to achieve that is through the imposition of tariffs on imported finished products, making importation of raw materials easy, manufacturing here, and making sure that we buy Kenya and build Kenya. President Ruto once said during the launch of a factory in West Pokot that a locally made Datsun is better than an imported Rolls-Royce, and I share that view. Our locally manufactured products may not be the best, but if we support them, we shall get there. In the Finance Act of 2022, this honourable House introduced excise duty on imported furniture. There was much debate, and some people said a lot of furniture cannot be produced locally. However, what have we achieved as a result? If you go to Ngong Road, Kiambu Road, the bypass, and my constituency, Molo, many people make furniture locally. We only imagine that expensive \"recliner seats\" can only be imported from China and Turkey. We now have The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
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"id": 1554331,
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"text_counter": 185,
"type": "scene",
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"speaker_title": "",
"speaker": null,
"content": "fundis"
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