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"id": 1485413,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1485413/?format=api",
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"type": "speech",
"speaker_name": "Nyando, ODM",
"speaker_title": "Hon. Jared Okello",
"speaker": null,
"content": " I thank you very much, Hon. Temporary Speaker, for the opportunity. From the onset, let me make it clear that I belong to the Committee on Delegated Legislation. We examined, re-examined and scrutinised the entire Special Operating Framework Agreement (SOFA) as pertains the Blue Nile Rolling Mills Company. Firstly, let me put it clear that the main source of revenue for a Government are taxes. There are issues of fines from courts of law which is paltry. Parastatals make little money in Appropriations-in-Aid, much of which is ploughed back into the same parastatals. The little that goes to the Treasury is not worth talking about. Therefore, taxes present the only viable opportunity for a Government to run its programmes. That is why treasuries all over the world would be very slow to grant any tax exemption to anybody and to any company, because by extension, that denies the Government an opportunity to make money. This SOFA idea emanated from the East African Legislative Assembly (EALA) that came up with a law that would allow certain countries to grant tax exemptions to particular companies within the East African Community (EAC). That is what gave birth to the East African Community Customs Act. Article 1 of our Constitution dictates that Kenya becomes a signatory to ratified treaties and conventions across the world. But there is usually a process; it is not blanket. Those protocols must be domesticated by countries such as Kenya for them to operate. This SOFA, whereas it has been recognised within the EAC as a protocol, was not domesticated in Kenya. Therefore, it could not be gazetted by the Attorney-General to operate within our borders. That is where the problem lies. How would a company be enjoying tax rebates and tax holidays based on a law that has not been domesticated? That was the gist of our interactions with all the players that came before us, including the Treasury. Article 50 of our Constitution pays credence to a fair hearing. I would be remiss not to make it clear that the Committee sent summons to the Blue Nile Group of Companies on numerous occasions. On all those occasions, they had one reason after another not to present themselves before the Committee. The Committee could not wait in vain, and so it went ahead and came up with the Report that is now before us. Interestingly, whereas they have been enjoined on a law that does not exist, other competitors also applied, but were denied an opportunity to enjoy the same rebates that this Blue Nile Group of Companies has been enjoying. The Competition Act, 2019 does not allow one single company to have an advantage over others. That is why companies that are also in the same line of work were at pains to transact business because the SOFA that was extended to the Blue Nile Group of Companies touched on certain raw materials that are used for manufacturing metals. We have a company that buys raw materials from abroad, which attracts no taxation, thus lowering their cost of production, against others who have to pay heavy taxes, therefore, giving an undue advantage to one particular producer. That is why we have this Report before us. Firstly, a SOFA that has not been domesticated in our country must be terminated. Secondly, under the Competition Act, 2019, everybody must operate on a level playing field. All metal-manufacturing companies should enjoy the rebates coming out of the SOFA. We challenged the National Treasury to give us a tabulation of all the taxes that the Blue Nile Group of Companies has been exempted from, so that we can know how much they need to pay as a penalty. We got some figures that were subjected to queries. As we dialogue and proceed with this matter, we will be asking more questions on that report from the National Treasury. Our country is suffering because we are not getting enough taxes from those who should pay taxes. If a company that trades in billions is circumventing the processes of remission of taxes, that must be questioned. This Report has gone to great lengths to prefer very harsh 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."
}