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{
    "id": 1003273,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1003273/?format=api",
    "text_counter": 357,
    "type": "speech",
    "speaker_name": "Kitui Central, WDM-K",
    "speaker_title": "Hon. Makali Mulu",
    "speaker": {
        "id": 1955,
        "legal_name": "Benson Makali Mulu",
        "slug": "benson-makali-mulu"
    },
    "content": "time. It is because some of the things being proposed here are very mild as a way of ensuring we cushion Kenyans from the effects of the COVID-19 pandemic. Let me just comment on the issue of rental income in passing because it has really been mentioned. One of the basic principles of taxation is simplicity. It has been made very simple. If you are collecting a rent of up to Ksh15 million, just pay 10 per cent and forget about it. You do not have to do a lot of tax returns. Come the end of year, you do not require to do any returns and it becomes easy. However, there is the issue of companies which are making losses being required to pay a 1 per cent gross turnover. This is a very complicated matter. Imagine a company is making losses and then it is expected to pay tax. I think it is something we really need to consider. I would want to see how much analytical work had gone into this. If a company is making losses and you tell them to pay a tax of 1 per cent of the gross turnover, the question is where does it get the money to pay? At the same time, you also need to ask yourself another question. If a company has been making losses year in, year out and it never closes, could it also be a situation of cooking books so that it does not pay taxes? To me this is really the issue we need to look at as we analyse this Finance Bill. I believe maybe the second point could be the most important, that companies are really playing around with their books of accounts so that they do not pay tax. So, when you bring up the 1 per cent of gross turnover, companies will most likely come out and start paying taxes. On the issue of digital market, I agree. I listened to the Members talk about the youth being really disadvantaged. To me, I would want to hear more analysis on this where we can say out of that digital market, what proportion or share of that market is being occupied by the youth. If they are occupying only about 10 per cent, the argument about protecting the youth does not come up. For example, if you take Uber and look at the kind of money they collect because we have all moved to Uber, would it be fair not to tax Uber just because they are in digital market because you want to save the youth who might be getting only 10 per cent of market share? To me the most important bit is looking at the market share. If most of the shares go to the youth, then there might be need to reconsider taxation of that area. When we analyse the Budget and we passed the Report of the Committee on Supply this afternoon, the issue is that the Budget must be funded. When we analysed during the budgeting process, we asked ourselves how come that we are having economic growth in this country every year but tax collection is going down. The question is on while the economy is growing, the expectation is that revenue collection should also be increasing. When you look at what is happening in this country, it is going down. Some of the reasons we were giving for not collecting the expected percentage in terms of GDP, one was tax leakages. When we say we are growing, we do not collect because there are so many holes where the money goes through. Even as we discuss this Finance Bill, the highest need is to make sure we minimise tax leakages on the revenues. That is so that whatever we collect is applied to the right development programmes. In that case we will be able to improve collection. The second issue which came out was tax exemption. That is why I must thank the Chair, Hon. Limo, for saying that time has come when this country must reduce tax exemptions. Some of the items we are exempting from tax make us not collect the amount required. So, time has come when we must only exempt tax only on essential services and goods. I like the idea of people saying we zero-rate maize flour because that is a basic need and, we zero-rate kerosene or gas because that will help with issues of afforestation. So, I think the whole issue of listing of items which have been tax-exempt needs to be relooked at so that those which are not essential, we take them out of that list and tax them and use 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."
}