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{
    "id": 1252713,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1252713/?format=api",
    "text_counter": 121,
    "type": "speech",
    "speaker_name": "Molo, UDA",
    "speaker_title": "Hon. Kuria Kimani",
    "speaker": null,
    "content": "stabilisation of the Kenyan Shilling and making the movement of certain sectors and consumables much cheaper. Our Committee also introduced an amendment to the First Schedule of the VAT Act incorporating taxable food supplies that are made for the School Feeding Programme acknowledged by the Cabinet Secretary for Education. During a time when we are talking about hunger, food security, and our school-going children, we have seen efforts by county governments to establish school feeding programmes. Our best example is the constituency headed by Hon. John Kiarie, which has been able to establish a very effective school feeding programme. Hon. Speaker, it is only Ksh20 per meal. We have zero-rated the Value Added Tax (VAT) for food supplies that are made for school feeding programmes. This means that those school feeding programmes that different institutions are trying to start in their schools will grow. Another example is what Mombasa Cement Limited is doing in Mombasa. It has a school feeding programme that feeds almost all school-going children in that particular county. The Committee observed that there was a proposal in the Bill to exempt VAT on transfer of businesses. This would have led to a loss of Ksh100 billion of the proposed tax. This is one of the clauses that we have recommended for deletion. When I transfer my money from my bank account to another one, I pay VAT and Excise Duty. When I transfer money from my M-PESA account to another M-PESA account, even when I am transferring money from one of my M-PESA lines to the other, I pay tax. Why should we exempt transfer of businesses from taxation? From the calculations given to us by the Parliamentary Budget Office (PBO), this would lead to a potential loss of Ksh100 billion. This is money that we now have in the Bill. Therefore, the deletion of this particular clause will mean that we will raise an additional Ksh100 billion. Clause 36 of the Bill was another contentious issue. It says what happens if you have a tax dispute, go to Tax Dispute Tribunal, and then you lose the case. If you want to appeal your case, you will be required to deposit 20 per cent of the disputed amount with the Kenya Revenue Authority (KRA). We found that this was a violation of the rights of taxpayers to access justice. It is unfair to require somebody who seeks legal redress because he feels aggrieved to be required to pay a deposit of 20 per cent for it. We urge this House to carry on the proposal for deleting this clause. I had extensively talked about Clause 43(b)(iv)(v)(vi) and (vii) of the Bill. Let me go to Clause 59 of the Bill. The deletion of Clause 59 from the Bill was about the Tax Procedures Act and its provisions leading to objections and appeals. This was opposing restrictions on access to justice. We said that the proposal should be deleted. Clause 61 of the Bill refers to Section 84 of the Tax Procedures Act. The Committee proposes that this clause be deleted due to its punitive nature concerning the tax shortfall penalty. Currently, Clause 61 imposes penalties for tax shortfalls without considering innocent and inadvertent taxpayer errors. This clause states that if you under-declare your taxes or the KRA feels that you have under-declared your taxes, they will penalise you for that. It may not be deliberate. It can be an accounting error made when you file your returns. Therefore, we have deleted that requirement for that penalty to be imposed on taxpayers. Clause 62 of the Bill is on penalties for failing to comply with the electronic tax system. This amendment seeks to insert a new Section 86 to modify the penalty provisions related to non-compliance with the electronic tax system. This makes the penalty more reasonable. This proposal recommended that if you are not on Electronic Tax Invoice Management Systems (IMS) or if you were found that you needed to issue an i-Tax receipt, but you did not issue one, then you would be required to pay a fine of 10 times the amount that was tax due. As much as we want to enforce compliance with this tax system, we felt that a fine of 10 times more was too punitive. We propose the penalty to be two times the tax due. 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."
}