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{
    "id": 1254222,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1254222/?format=api",
    "text_counter": 173,
    "type": "speech",
    "speaker_name": "Prof. Njuguna Ndung’u",
    "speaker_title": "The Cabinet Secretary, National Treasury and Economic Planning",
    "speaker": null,
    "content": "other financial service providers. In the same spirit, I propose to the National Assembly to reduce Excise Duty from 12 to 10 per cent of the excisable value of fees charged for money transfer services by cellular phone or payment service providers licensed under the National Payment System. This will encourage retail transactions at a more affordable rate and promote economic activity at Micro-Medium and Small Enterprises (MSME) and individual levels. Locally produced cement has been facing stiff competition from imported cement. To protect and promote this industry, I propose to the National Assembly to introduce Excise Duty on imported cement at 10 per cent of the excisable value or Ksh1.50 per kilogramme, whichever is higher. There has been an increase in importation of furniture, especially office furniture. This has negatively affected local carpenters and artisans, considering there is enough local capacity to make furniture. In order to protect local carpenters and artisans, I propose to the National Assembly to impose an Excise Duty on imported furniture at a rate of 30 per cent of the customs value, excluding the furniture originating from EAC countries. Kenya has sufficient local capacity to produce paints, varnishes and lacquers. However, the proliferation of cheap imports has reduced the competitiveness of locally produced paints, varnishes and all associated products. To protect local paint manufacturers, I propose to the National Assembly to introduce Excise Duty at 15 per cent of the excisable value on imported paints, varnishes and similar products. Hon. Speaker, I will now turn to amendments to the Income Tax Act. Let me highlight the changes proposed under the Income Tax Act. The current interest deduction restriction based on earnings before interest, taxes, depreciation and amortisation was introduced in 2021 to discourage tax planning. This restriction currently applies to both local and foreign financial institutions. Hon. Speaker, I have received proposals from taxpayers who borrow loans from local financial institutions indicating that the restriction discourages their access to credit. To address this concern, I propose to the National Assembly to exclude interest on loans borrowed from local financial institutions from interest deduction restrictions. In addition, Hon. Speaker, where interest on loans borrowed from non-residents is disallowed, I propose to the National Assembly to allow businesses to carry forward that interest for deductions in the next five subsequent years. This will align with the international best practice. Hon. Speaker, in 2016, the Government introduced a simplified tax regime that requires landlords to pay tax on residential rental income at the rate of 10 per cent per month. To enhance compliance and encourage more landlords to pay tax under this regime, I propose to the National Assembly to reduce the tax rate for this regime from 10 per cent to 7.5 per cent per month."
}