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{
    "id": 1442036,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1442036/?format=api",
    "text_counter": 134,
    "type": "speech",
    "speaker_name": "Molo, UDA",
    "speaker_title": "Hon. Kuria Kimani",
    "speaker": null,
    "content": "Clauses 34 and 35 are about the provisions under the proposed amendment on the VAT Act. The Committee adhered to several guidelines including zero rating only the most essential consumption items for household and agricultural inputs, exempting inputs used in the manufacturing of medical services, safeguarding the financial sector by restricting VAT on services, taxing goods and services where only value is added in the production process and exempting specific inputs to include local industries. Based on this, the Committee proposes to zero rate items such as ordinary bread, unleavened bread, gluten free bread, inputs and raw materials supplied to manufacturers of agricultural and pest control products, agricultural pest control products and transportation of sugarcane from farms to milling factories. Hon. Speaker, a question has been asked why sugarcane and not any other product. I would like to tell Kenyans that out of all the agricultural products that we have in this country, the bulkiest one in terms of weight is sugarcane. Therefore, the largest cost in value addition on sugar is the transportation of sugarcane. Additionally, we have proposed zero rating of locally assembled and manufactured mobile phones, among others. Last year, this House made a decision to zero rate local assembly of mobile phones. As a result of that, we have seen institutions such as the African Device Assemblers of Kenya assembling a total of 400,000 phones every month. They have created employment for over 1,000 Kenyans. In fact, they cannot even satisfy the demand on the supply of the mobile phones to this country. We want to tell Kenyans that it is possible to manufacture our things here. We do not have to import these things from other countries. Let us support our manufacturing. Let us make sure that we use the locally manufactured products. The Committee further recommends exempting several products from VAT including the issuance of credit and debit cards, foreign exchange transactions, sanitary towels, diapers, and services to local film agents. Clause 39 of the Bill proposes the removal of provision granting relief on excise duty to manufacturers of excisable goods and providers of internet data services. The Committee recognises that excise duty similar to VAT considers input and output tax for manufacturing of excisable goods. Therefore, removing Section 14 of the excise duty would prevent manufacturers from deducting excise duty thereby potentially raising production costs and necessarily leading to higher prices to consumers. This deletion aims to safeguard Kenyans from increased prices of essential commodities. It is the East African Community (EAC) practice that excise duty on inputs become a tax allowable expense to manufacturers. The risk of passing Section 14 as proposed in the Bill would mean that we would potentially make it cheaper for someone to go and manufacture in a different country and then import into this country duty free. This Committee was very conscious on the need to protect our manufacturers and make sure we buy Kenya and build Kenya. Clause 42 addresses excise duty on goods where the Committee is guided by the following policy criteria: 1. To exempt from excise duty certain locally manufactured products so as to promote local industries; 2. To exempt certain products so as to curb increases in consumer prices; and, 3. To improve the ease of administration of excise duty Based on these criteria, therefore, the Committee recommends the following: exempting vegetable oils, fertilised eggs, and clinkers from excise duty. I would like to explain the difference between these eggs. We have what you call table eggs; these are the ready to eat eggs. It is what we eat at our restaurant or our homes. We have incubated eggs or what you call 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."
}