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{
    "id": 147213,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/147213/?format=api",
    "text_counter": 163,
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    "content": "negligence to ensure investors are adequately protected. These policy measures are aimed at restoring investor confidence in the Capital Markets. Sixth, currently financial services offered by banks or financial institutions are exempted from VAT. However, financial services offered by non-banking and non- financial institutions are taxable. To create a level playing ground, I propose to list and exempt financial services from VAT, irrespective of the institution offering it. Seventh, long term financing, especially for the development of our infrastructure remains a major challenge. In this regard, I propose first to reduce withholding tax from 15 per cent to 10 per cent on interest arriving from long term bonds of ten years maturity and above. Secondly, to grant capital deductions to any person entering into a concessioning arrangement with the Government. Such an investor would be able to recover the cost incurred in the purchase of substantial improvement of any machinery over the period of the concession. Eighth, Mr. Speaker, Sir, the Government has in the past availed numerous fiscal incentives to attract listings in the Nairobi Stock Exchange. Unfortunately, this has not improved the situation as anticipated, since only five companies have so far taken advantage of the incentive. Mr. Speaker, Sir, one of the arguments from the market players is that the listing process is long and attracts a very high listing fee at the rate of 0.3 per cent of the value of the issuance without a curb. In this regard and in order to deepen the Capital Markets development, I propose to amend the relevant law to reduce the listing fee by 50 per cent. That is from 0.3 per cent to 0.15 per cent for new public offers of equity. This is expected to facilitate raising of additional capital for expansion and growth of interested companies as well as availing the opportunity to more Kenyans to own local companies. Ninth, the Government established a Retirements Benefits Authority (RBA) in order to regulate and streamline the pension schemes in the country and guarantee better incomes to the scheme members after retirement. However, in the past, we have witnessed imprudent investments made by a category of pension schemes in total disregard of the RBA rules and regulations, leading to huge losses of member's hard- earned savings. In order to address this problem and to ensure that member's contributions are safe and prudently invested, I propose to amend the Retirement Benefits Act to require that new investments by pension schemes that receive statutory contributions be put in Government securities and infrastructure bonds used by public institutions only. This will go a long way to guarantee a steady rate of return, thereby increasing confidence for Members’ returns. It will also seal the abuse by the aforementioned schemes to sink members’ funds into dubious investments. Tenth, Mr. Speaker, Sir, Defined Benefits Schemes are required under the law to undertake actuarial valuations every three years in order to establish their liabilities and funding levels. The minimum funding level allowed under the law is 80 per cent of the value of the accrued liabilities. Although schemes have continued to be valued, it has been noted that schemes which are being discontinued have had difficulties meeting their liabilities, especially where the scheme’s funding level is below 100 per cent. In order to ensure that schemes are able to meet their liabilities as and of when they fall due, I propose to amend the Retirement Benefits Act to increase the minimum funding level from 80 per cent to 100 per cent for all defined benefits schemes both on an ongoing and discontinuance basis."
}