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{
    "id": 1073551,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1073551/?format=api",
    "text_counter": 110,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "Sometimes earlier this year and I believe from the beginning of this year, this House passed a law that said every business will have to pay one per cent of its gross turnover as tax, whether you are making a profit or not. Now, I know that matter has been suspended by the courts but that does not stop us from doing our work here. The rationale of that was that there are people who are constantly claiming losses to avoid paying tax. Now, that could apply for us here as individuals, private citizens. But the Government cannot cheat itself on its tax. What Government entity can avoid declaring a profit to avoid taxation? The Government is the shareholder; it knows whether it made profit or not. So, the Government cannot manipulate its tax books on itself, against itself. Private individuals could do it as a way of evading taxes. If you look at Kenya Airways, it is 48 per cent owned by the Kenyan Government in shareholding. If you add the guarantees to the other loans, there is no doubt that Kenya Airways is owned by the Kenyan Government. Kenya Airways has been making losses. It may have turnover in the billions. But, when you look at the losses it is making and you ask it to pay one per cent of its turnover as a minimum tax, you are taking it into a deeper loss situation. You will be asking the National Treasury to pay tax to KRA on behalf of Kenya Airways. Then, KRA will take it to the National Treasury and then the National Treasury will give it back to KRA. It is more of the left pocket paying the right pocket. It is a zero-sum game. So, I know calculations have been done given that kind of situation. Because of the very nature of this business and looking at the history with which Kenya Airways has run, there is loss. The Committee has gone through all that. The entire airline industry is in a shambles globally, even before Covid-19 and post Covid-19. If you look locally, the South African Airlines was the leader in Africa. From the information I have, the South African Airways is operating on only eight aircraft. They have surrendered all the others to the lessors and said they want to minimise their losses. They went into administration, which is receivership and surrendered all their aircraft and limited their routes. Kenya Airways could well have done the same and may, perhaps, end up doing the same at some point. If you look at Lufthansa of Germany, they have had to be bailed out with 9 billion Euros. The Emirates made a loss of 15 billion dollars last year. So, every airline has made losses. To expect Kenya Airways with losses to pay one per cent of its global turnover as minimum tax is killing it or passing a law that is not enforceable. So, it is on this basis that the National Treasury looked at it and asked whether there is some way we could avoid killing Kenya Airways which is a national carrier. It is what is supporting the farmers out there. Do I have five minutes or more?"
}