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"content": "However, because the President lifted the lower income on those who are employed, this Bill also proposes to lift the lower limit for those earning rental income from Kshs144,000 to Kshs288,000 per year basically to align it with what was implemented in April. On the same proposal, the National Treasury is actually keen on raising some revenue from it and it will raise at least Kshs200 million if this proposal passes. Additionally, there is also a new proposal on taxation on Corporate Tax where initially you find that companies who have been declaring losses have never been paying taxes. It has been realised that there are certain companies that upon incorporation make losses throughout and, therefore, not paying any taxes while enjoying the infrastructure which has been laid by the Government like roads, electricity, and water. Therefore, they are not contributing to the Government's effort to provide robust infrastructure in this country. To bring them on board so that all of us can contribute to the development of this country, there is a proposal to introduce a minimum tax where business people will be required to choose which option they will take. The options are you either pay by declaring profit; pay what you ought to pay as per the Income Tax law or pay minimum tax as computed on gross turnover. Therefore, you take your gross turnover, compute 1% and then you compare with what you have computed using the conventional computation of income and, therefore, you chose. The requirement here is that whichever is higher, you pay to the Government. Therefore, that is the proposal. This is a very good proposal. Many countries, and in fact, in our Report we have attached a list of 55 countries, use alternative tax computation than the conventional ones. Some of them either use turnover or adjusted income. These countries, if you look at the list which has been attached to our Report, include countries like: a. Belgium. b. Guinea. c. India, which is using what they call adjusted book profits. d. Liberia, which is even applying 2% while Kenya we are only proposing 1%. e. Mexico, which is basing on gross assets. f. Philippines, gross income, 2%. g. Puerto Rico, which is actually very high adjusted income at 30%. h. Tanzania, which applies turn over just like what we are proposing here. i. The USA; which is charging at 20% but on adjusted income. Hon. Speaker, I have just mentioned an example of countries, including Chad, Colombia and others. But there is a list of 55 countries. So, this is something that is long overdue. The Government is aiming at collecting at least Kshs21 billion. In our estimation as the Committee on Finance and National Planning, if we put in proper systems, we will collect not less than Kshs30 billion."
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