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{
    "id": 146418,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/146418/?format=api",
    "text_counter": 370,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "Mr. Temporary Deputy Speaker, Sir, the other area that I would like the Deputy Prime Minister and Minister for Finance to consider is the stringent measures that are put against a contractor. You will find that before a contractor is awarded any work to do, he is supposed to produce a performance bond and a bank guarantee, which he or she is supposed to finance through collateral. You have to get the collateral in order to get the bank guarantee. Getting that bank guarantee will cost you some money because it will generate some interest. Then, when you are given that contract and you start work on it, when you make your first certificate to be paid, VAT, retention and a Withholding Tax of 2 per cent is deducted from that certificate. So, you find that if you had a claim of Kshs10 million as a contractor, 16 per cent is taken as VAT. You are forced to procure goods to service that contract. You are forced to pay VAT again at the procurement point. So, you will find that you have tied 32 per cent of your capital into that VAT arrangement. There is also the 10 per cent retention money which is deducted from the contractors. I find this duplication. Why do you take a performance bond from a contractor that is financed by a bank guarantee and then retain 10 per cent of the payments you are supposed to give to the same contractor? By doing that, you are tying money that belongs to a contractor and should be used to complete the contract in good"
}