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{
    "id": 1043570,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1043570/?format=api",
    "text_counter": 202,
    "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": "Hon. Deputy Speaker, I know many people have asked whether it was the right decision to reduce the tax rate of individuals especially those who were earning the upper bracket. I would answer this by saying that unless you take your time to actually understand why it was necessary to reduce the tax rate at that time, then you may not see the benefits. The main reason why the tax rates were reduced was we were staring at drying up of liquidity in the economy when most of the companies were reducing staff. Some were actually reducing the number of staff and reducing productivity. People were becoming apprehensive. There was a possibility that we were going to have liquidity challenges in the economy. Therefore, any responsible Government would move with speed to increase liquidity. So, even if you are a high income earner and you get increased liquidity, chances are that you would spend that money in the economy to spur that growth. That was the main reason why even those who were earning income that was being taxed at 30 per cent, that tax rate was reduced to 25 per cent. You will agree with me that those who were earning, for example, a Kshs1 million a month ended up with Kshs50,000 in their pockets which they were not earning before and if they spent it on the economy, then the economy would have liquidity. That was one of the reasons."
}