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{
    "id": 1003232,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1003232/?format=api",
    "text_counter": 316,
    "type": "speech",
    "speaker_name": "Suba South, ODM",
    "speaker_title": "Hon. John Mbadi",
    "speaker": {
        "id": 110,
        "legal_name": "John Mbadi Ng'ong'o",
        "slug": "john-mbadi"
    },
    "content": "Committee for doing a good job and making various proposals to reverse some of the recommendations by the Cabinet Secretary, I hope that when we get to the Committee of the whole House… I must confess that I have not read the details of the Report of the Committee. What I did was simply to take the Finance Bill and analyze it. So, my contribution will be based on the original Bill without the benefit of the Report of the Committee. However, I hope the Committee has tabulated and calculated how much we are going to lose by making various amendments to the Finance Bill, so that we know as a country how much extra budget deficit the country is likely to have. When the Treasury talked about Kshs1.62 trillion as the projected revenue, it had factored all the proposals that are in the Finance Bill. I ask the Chair of the Committee that when we get to the Committee of the whole House, for each of those amendments, he should mention to us how much we are likely to lose by making them. That is the first comment I want to make. Secondly, I have no issues with a proposal to amend the Residential Rental Income Tax to push the upper limit of the amount where the 10 per cent rate of tax is applicable from Kshs10 million to Kshs15 million per year. I would not have any problem with that. I think it is also beneficial to those landlords who are getting rental income above Kshs10 million, so that they pay a lower rate. Otherwise, any amount beyond Kshs10 million rental income was treated as any other income and, therefore, you were required to pay income tax, previously at 30 per cent but now at 25 per cent. So, this will be a relief, if those individuals were actually paying tax. The problem we have in this country is that a number of those potential taxpayers do not actually pay tax. The issue of minimum tax has been canvassed and discussed in this House. I do not want to dwell on it so much. I want to move to the digital services tax. I want to disagree slightly with some of my colleagues who have not seen the merit in imposing this tax. Digital services tax is a consumption tax. My background in accounting, finance and taxation tells me that most consumption taxes are not as punitive because you only pay when you consume the service. And you consume the service when you can afford it. So, as much as we may want to protect consumers, we must also be alive to the fact that the Government needs money to function. There is no way the Government will be able to provide services, including the health services that we desperately need today, without taxing Kenyans. And we must agree that, sometimes, we must let go of some of the comforts that we have enjoyed previously. One may argue that charging 1.5 per cent of turnover may hurt irreparably because that may not even be the profit that those businesses make. That is the argument that I think can make sense. But just saying that digital services tax is not desirable, in my view, is disagreeable. It is interesting that we are now telling Kenyans that it is no longer necessary to provide incentives to save for home ownership and we talk of affordable housing. In fact, we have told the Government a number of times that it is not the duty of the Government to provide housing to individuals. A good government should provide a platform and a favourable environment for individuals to own their own homes. It is not the business of Government to build houses all over the place for individuals. It is not even affordable for poor countries like Kenya. So, I do not understand the rationale that the Government now thinks that it is important to impose this taxation yet, previously, we had acknowledged that it is something that would be necessary to motivate more Kenyans to save to own homes. Something that I think also needs to be looked at is the issue of subjecting some expenses to tax, like the issue of certain costs incurred for purposes of listing at the Nairobi Securities Exchange (NSE). We should not send wrong signals to the economy, and especially the financial sector. The intention may be perfect, but what message are you sending across? You are sending the message that now you are going to subject NSE to taxation because the economy is struggling. 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."
}