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{
"id": 1252711,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1252711/?format=api",
"text_counter": 119,
"type": "speech",
"speaker_name": "Molo, UDA",
"speaker_title": "Hon. Kuria Kimani",
"speaker": null,
"content": "and Non-Fungible Tokens (NFTs). Many stakeholders expressed their desire to have this proposal removed as they believed it would discourage traders. However, the Departmental Committee on Finance and National Planning noted that the reason for setting up the tax rate of 3 per cent of the gross turnover is to facilitate compliance, trading and for simplifying the process. If this Bill passes, Kenya will become one of the first countries in the region to recognise cryptocurrencies, digital assets and bitcoins as a form of payment and trade and therefore generating revenue from these digital assets. The Departmental Committee on Finance and National Planning observed that clause 12 that restricts expenses without eTIMS invoices as complemented by Clause 57, would exempt individuals from registering in the electronic management system. The exemption ensures that small traders, popularly known as mama mboga, and others in the informal sector, are not negatively impacted by this particular proposal. Additionally, we have proposed that the Commissioner will issue administrative guidelines to address any concerns regarding the implementation of this system. We have emphasised the need to have every trader and business person in the country operating within the eTIMS system. This, we realised, would enhance both revenue collection and reduce the cost of tax administration. Stakeholders expressed their concern on Clause 20, which would require that withholding taxes be remitted to the Kenya Revenue Authority (KRA) within 24 hours. They believed that this timeline was too short and would result in additional administrative expenses. We have had many institutions that withhold either Excise Duty or VAT, meaning that they are agents for the collection of these particular taxes. These agents had up to 50 days to remit these particular payments to KRA. We noticed that by holding onto these tax revenues for 50 days, these businesses were being funded through their working capital by taxpayers’ money. We appreciate that reviewing the period from 20-50 days to 24 hours for the money to be remitted to KRA was a little too ambitious. The Committee amended that to allow businesses to remit these tax revenues within five working days. The key words “working days” take care of the complexities of weekends and official public holidays. Clause 24 was also contested by many stakeholders who were concerned about the proposal to increase the PAYE rate for individuals earning more than Ksh500,000. Having considered this, we also found that our tax bands have not been amended for years. One of our recommendations is that even if we are unable to amend our tax bands in this Bill, there is a need to revise our tax bands for PAYE because they have not been revised for very many years. We suggested that instead of having the 35 per cent PAYE rate only accruing on incomes from Ksh500,000 and above, we add a tax band of incomes from Ksh500,000 to Ksh800,000 to be charged at a PAYE rate of 32.5 per cent, and those earning more than Ksh800,000 to be taxed at a rate of 35 per cent. Clause 24 introduced a Withholding Tax of 15 per cent on digital content. However, Withholding Tax on other professional fees such as legal, accounting, management, and all other professional fees is at 3 per cent. That is why we found that charging digital content creators 500 per cent more was unfair and punitive to this growing sector. Instead, we propose that this Withholding Tax be reduced to 3 per cent. It is also good to appreciate the expansion of this sector. We have very many Kenyans, especially the youth, who are excelling very well in this space. However, some people were asking us why we were taxing them. I would like to remind our digital content creators that teachers who recently got employed and earn an income of Ksh30,000 per month pay their rightful share of taxes. Nurses who help mothers deliver in hospitals, or treat our old relatives and people in home-based care; doctors who work day and night to save lives; and emergency attendants who work in ambulances, all pay their rightful share of taxes. So, we are not asking digital content creators to pay a Withholding Tax of 15 per cent because that will vary too much, but we are politely asking them to pay a 3 per cent 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."
}