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{
    "id": 102954,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/102954/?format=api",
    "text_counter": 97,
    "type": "other",
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    "speaker": null,
    "content": "I expect and strongly urge that savings from this will be used for insurance and pension schemes as well as familiarizing themselves with the Highway Code. Mr. Speaker, Sir, in the past years, payments made to retirees have continued to be enhanced by removing tax on pension paid to senior citizens, increasing the tax free amount for pensioners whose income is subject to tax and taxing pensions under withholding tax system instead of Pay As You Earn (PAYE) tax band. To extend this benefit to those working on contract, employers who set up retirement benefit schemes and pay gratuity to such schemes will be allowed a reduction for tax purposes and the employees who accept to have their gratuity paid into the scheme will not be taxed on the same. This proposed measure shall enhance the financial security of such employees when they retire. As we take care of our retirees, we must equally take care of those of us who find pleasure and dignity in having a drink. Indeed, over the years, consumers of beer have felt that they are the victims of every Budget Speech. To demonstrate that this perception is not well founded, the Government has maintained the same rate of Excise Duty on beer since 2005. During this long and much deserved break, the prices of these product have, however, been adjusted annually upwards by manufacturers for various reasons ranging from the rise in cost of production and inflationary factors. Mr. Speaker, Sir, due to the fact that Excise Duty on these products is specific rather than advalorem, duty has tended to lag behind the price adjustments. To bridge the gap and to take care of the inflation factor, I propose a modest increase of Excise Duty on malt beer from the current rate of Kshs54 per litre to Kshs65 per litre and that of non-malt beer from Kshs45 per litre to Kshs55 per litre. This measure is expected to give the Ex-chequer an additional Kshs2.5 billion. I have already outlined specific steps we are taking to deepen the overall tax reform in our country. In the short time, however, I propose some tax administration measures under various legislations to improve tax administration. Mr. Speaker, Sir, the Kenya Revenue Authority (KRA) has invested heavily in information technology with online services for tax payers registration and return filling now available. However, the uptake of this efficient system has remained low. To encourage the usage of this system, I am proposing to amend the law to require the Commissioner to gazette those tax procedures or formalities which should be done online and to further specify those who should carry them online. Our construction sub-sector players’ cash flow position has continued to be constrained by the withholding of VAT at 16 per cent and the slow pace of VAT refunds. To address this problem and in order to improve their cash flow positions and to allow them to expand their capacity, I propose to reduce the tax withheld by the Ministry of Roads which is the major withholding agent from 16 per cent to 18 per cent. Mr. Speaker, Sir, I intend to overhaul the VAT and come up with a modern tax legislation in line with best practice. In this regard, I intend to form a task force to come up with the new VAT Act which I expect to table in this House by June, 2011. Kenyans in the Diaspora have, through their continued remittances of huge amounts back home, demonstrated their desire to invest in their mother land. However, due to the requirement under our taxes system for declaration and filling of returns, a number of these Kenyans have shied away from remitting funds for investment. In order to encourage such remittances as a source of investment and to facilitate economic recovery in our country, I propose to amend the law to give"
}