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{
    "id": 1252714,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1252714/?format=api",
    "text_counter": 122,
    "type": "speech",
    "speaker_name": "Molo, UDA",
    "speaker_title": "Hon. Kuria Kimani",
    "speaker": null,
    "content": "We are proposing an amendment to the Bill to include a new Clause 67. This will address the powers granted to the Commissioner regarding the adjustment of specific rates of Export Levy. Currently, Section 5(4) of the Miscellaneous Fees and Levies Act allows the adjustment of specific rates of export levy to account for inflation. However, it is proposed that this provision be removed as it mirrors Section 10 of the Excise Duty Act. Clause 36 of the Bill already seeks to eliminate the Commissioner’s power to adjust specific excise duty rates based on inflation. The rationale behind those proposed amendments is to ensure consistency in the treatment of specific rates for both Export Levy and Excise Duty. Clause 76 of the Bill states the deduction of the National Housing Development Fund, which is another very contentious issue. We listened to the views of Kenyans. They told us it was good to make houses affordable to the public. It is a good thing when somebody who rents an apartment in Kinoo, Section 58 or any part of the country has an alternative of paying the equivalent of the rent but owns that house at the end of a particular period. Access to mortgages remains a privilege for high-end people in this market. Every stakeholder told us that it would lead to job creation. There are doors and windows that will be made. There will be suppliers for those goods. There are people who will provide the rest of the services. That is the spiral effect of it. There are people who will sell food in those units. The stakeholders said there was need for the Housing Fund. However, they were worried about how it would be deducted. They told us that it was too punitive to start them off with 3 per cent of the basic pay. One of them candidly looked me in the face and told me that if we capped the Housing Fund to Ksh2,500 a month, and we told them that was 3 per cent, it was not true. You pay 0.0045 per cent of your basic pay. They said this was discriminative. They felt that people who earn a lot more wanted to pay much less than them. If he earns Ksh80,000, he will pay his rightful share of 3 per cent. However, those who earn Ksh500,000 would pay 0.0045 per cent because we had capped that contribution to Ksh2,500. We listened to the views of those Kenyans. We proposed a reduction in the National Housing Development Fund contribution from 3 per cent from the employer and employee to 1.5 per cent. It is very important to note that the capping of the contribution at Ksh2,500 has been removed. This would have been discriminative against those people who earn less. They would have paid their rightful share of their 1.5 per cent, but those who have a higher payslip would pay much less. We have also established that those funds will go into the Consolidated Fund as per the Public Finance Management (PFM) Act. Hon. Speaker, the shift towards the informal sector also poses challenges to our tax revenue as the economy diversifies job opportunities arising in all sectors. It has become crucial to expand our tax base. Kenyans told us that only some people pay taxes. However, very many others should pay their rightful share of tax, but they do not pay. Key in point was the small businesses. There is a proposal to have a turnover tax threshold of Ksh500,000. This means those people with sales of around Ksh1,600 a day will be required to pay a turnover tax of 3 per cent. This band is too little. Therefore, we have proposed increasing this band of Kenyans who would pay the turnover tax to those with sales of at least Ksh1 million to Ksh25 million per annum. Hon. Speaker, people asked why they were being taxed on gross sales instead of profit. We have told them that you do not have to pay turnover tax at the end of the year. You can pay the corporation tax at 30 per cent. However, you will have to calculate your revenues and deduct your taxable expenses. Many Kenyans do not want to go through that process. They just want to know their rightful share of tax and pay. I wish to thank the Members of the Committee. It was very tedious work. Most of us still have a back problem till now. Members of the Secretariat have been doing almost 24 hours of work to make sure we put this Report in order. 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."
}