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{
    "id": 1038011,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1038011/?format=api",
    "text_counter": 413,
    "type": "speech",
    "speaker_name": "Molo, JP",
    "speaker_title": "Hon. Kuria Kimani",
    "speaker": {
        "id": 13435,
        "legal_name": "Francis Kuria Kimani",
        "slug": "francis-kuria-kimani"
    },
    "content": "This agreement was first of all signed on 7th May 2012 and that is the first time His Excellency the President signed this agreement. It has taken a cool eight years for it to come to Parliament so that it can be effected. What does that mean to the eight years that is has taken for this process to go through? There is a concept called the value of time. So, any business decisions that someone needed to make by virtue of this agreement means that they are eight years late. Eight years of doing business is so long that if there were particular entities that, for example, had seen some potential in some particular industry in Kenya, then they most likely would have already pulled off. How have we found ourselves in such a situation? Despite us having legal experts in every Ministry and state department, we still find a lot of these errors happening and a lot of these treaties being signed without the ratification of Parliament. It is very sad that it has to take intervention of the civil society and our courts so that the correct procedure is followed and consequently wasting eight years of having the potential to do business. Hon. Duale could not have put it any better about the importance of double taxation. One of the challenges we have as the Departmental Committee on Finance and National Planning, and we are seriously deliberating on how to bring a solution to this, is that we also have double taxation in our own country. For example, you pay Income Tax, Corporation Tax for our companies and recently we introduced a minimum tax that is supposed to take effect next year. As a result, it is confusing the tax regime in this country and makes Kenya unfavourable to do business in terms of our taxation. I took some time to find out why Mauritius is one of the countries in the world that has signed the greatest number of such treaties in the world. So, what has Mauritius done that is very different from us? They have realised that increasing their taxation does not necessarily mean that they get more revenue. It is said that Mauritius has the most generous tax regimes with only 15 per cent Corporate Tax and 15 per cent Income Tax. The companies that think of locating here in Kenya would rather go and domicile themselves in Mauritius because of the very good tax regimes there. They would then come to do business in Kenya as subsidiaries. Consequently, although we benefit from them doing business here, we have already signed a treaty saying that we cannot double-tax them. So, who are the real beneficiaries? The real jobs that should have stayed here in Kenya are going to Mauritius. Despite how many treaties we sign, this particular one is more beneficial to Mauritius than it is to Kenyans. We do not have an option. If we do not do this, those companies would rather go and operate in Mauritius than in Kenya. We need to make deliberate decisions on how to simplify our tax regime. We should make sure that we have a one-stop tax system so that collection of taxes happens once, consequently making it easier for companies to do business. I also note that Mauritius is said to have the best infrastructure in Africa. Here in Kenya, we are making great steps, but as long as we do not connect our villages - our Njoro–Molo Road remains unfixed and other inter-country roads remain terrible - we may not get to benefit. We should look forward to ratifying such agreements where Kenya is a bigger beneficiary. I support."
}