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{
"id": 1079719,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1079719/?format=api",
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"type": "speech",
"speaker_name": "Hon. (Ms.) Gladys Wanga",
"speaker_title": "",
"speaker": {
"id": 590,
"legal_name": "Gladys Atieno Nyasuna",
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"content": "effective collection of revenue as relates to the Budget of the fiscal year 2021/2022. The omnibus Bill seeks to amend the Income Tax Act, the Value Added Tax Act, the Excise Duty Act, the Tax Procedures Act, the Miscellaneous Fees and Levies Act of 2016, the Capital Markets Act, the Insurance Act, the Kenya Revenue Authority Act, the Retirement Benefits Act, and the Central Depositories Act. The Bill is being considered at a very delicate time when Treasury and Members of this House have to balance between cushioning Kenyans from the COVID-19 pandemic, but at the same time raise sufficient revenue to finance the Ksh3.6 trillion Budget or the supply we have just done through the Appropriations Bill. Again for the record, because many people will ask whether there was public participation, pursuant to Article 118 of the Constitution and Standing Order 127(3), the Committee conducted public participation. We received memoranda from a total of 56 stakeholders. I want to mention a few of the stakeholders who always participate. They always submit views. I want to mention them for their patriotism. One such stakeholder is Augstin Martin, a young Kenyan who at every point comes to participate and submits views to protect wananchi, but also to protect the government from revenue leakage. We really thank him. Others are Asian Manufacturers and Kenya Private Sector Alliance, who are always there to make presentations. We listened to a total of 34 stakeholders who made oral presentations on many views that were proposed. Clause 2 of the Bill seeks to reintroduce definition of the term control. Previously, control was defined as 25 per cent of the capital. The current proposal seeks to define control more widely. If a person holds, at least 20 per cent of voting rights in a company, then that person is considered to have control. If a person has advanced a loan of at least 70 per cent that person is considered to have control. If company X guarantees up to 70 per cent of a loan for company Y, then company X is considered to control company Y. If a person appoints more than a half of the board of directors, the person is considered to have control. If a person is the owner or has exclusive rights over the knowhow or copyright or patent, the person is also considered to have control. But then there is also another issue that the Committee discussed at length, which is paragraph (f) of Clause 2 of the Bill. It says that if company X supplies at least 90 per cent of the purchases company Y, then company X is considered to have control of company Y. But the question that we raised is: Is that really a practical form of control? An example is people who supply specialised equipment or services. For instance, Boeing supplies 100 per cent of the planes owned by Kenya Airways (KQ). Can Boeing be considered, just by virtue of that supply relationship, to have control of KQ? So, the Committee will be proposing certain amendments to state that this supply relationship can only be considered control if the other person is considered by the commissioner to be influencing prices. If Boeing is supplying planes at a very high price, then KQ will declare very little profits. In that case, you will consider that Boeing is in control. If they are declaring small profits, it means reduction in taxes. We listened to several views on this matter of control. Some even said we should delete this entire definition of “control”, but the Committee did not agree. The Committee will be making amendments to just streamline the issue of supply and purchase as factors of control, but will not be agreeing with stakeholders who said that this definition should be deleted. The Bill also introduces the definition of the term “Infrastructure Bond” which will be issued by Government for financing of strategic infrastructural facilities including roads, hospitals, ports, sporting facilities and so on. Under this definition, “Infrastructure Bonds” or interest earned on them are exempted from income tax and can be used to finance projects as listed. 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."
}