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{
    "id": 1590416,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590416/?format=api",
    "text_counter": 346,
    "type": "speech",
    "speaker_name": "Molo, UDA",
    "speaker_title": "Hon. Kuria Kimani",
    "speaker": null,
    "content": "development budget. But in as much as there is need to clean up the First and Second Schedule of the Value Added Tax (VAT) Act on the zero-rated and exempt status, it is also important to realise that we also operate under other protocols across the region. Like the East African Community (EAC) protocol and the African Trade Protocol. If we do not have these incentives in our local market, the African Trade Protocol would enable manufacturers to move to a different country, manufacture there, and we end up importing those products. It is therefore, very important that we are very deliberate to continue with the incentives that support our local manufacturing. Most importantly, we have provided another clause where this abuse of exempt status or zero-rate status will now be punishable. There are administrative measures to make sure that these incentives of zero-rating and exempt status are used properly administratively, rather than punishing a whole sector and making us uncompetitive in the region. Clause 36 proposes subjecting several strategically important goods to the standard 16 per cent VAT rate. However, after careful consideration, the Committee recommends that these goods remain listed under the First Schedule and continue to enjoy VAT-exempt status due to their critical role in advancing key national development priorities. The goods in question include items used in the construction of tourism infrastructure, such as recreational parks and conference centers, and sectors that contribute significantly to foreign exchange earnings and job creation. In 2023 alone, tourism contributed over 10 per cent to the Gross Domestic Product (GDP), and supported more than 1.6 million jobs. Similarly, the exemption for goods used in hospital construction and equipment, especially for specialised hospitals with at least 50 beds, is very crucial in strengthening healthcare infrastructure and in line with our Universal Health Coverage (UHC) agenda. Furthermore, the exemption of aircraft spare parts and tourist transport vehicles aligns with Kenya’s ambition to solidify its status as the aviation hub of the region, and boost high- value tourism. The VAT exemption for inputs used in affordable housing projects directly supports the Government's housing agenda by lowering construction costs and accelerating project delivery for low and middle-income earners. Exempting renewable energy equipment also reinforces Kenya’s commitment to transitioning to clean energy, in line with national climate goals and global sustainability commitments. Additionally, exempting weighing machinery for hospitals ensures that healthcare providers are not burdened with additional costs for critical diagnostic tools. The Committee’s recommendation to preserve VAT exemption for these items reflects a deliberate effort to align fiscal policy with the Government’s overarching development agenda. This will ensure that tax measures promote, not hinder, progress in sectors that are vital for economic transformation and social well-being. Clause 52, which proposes to grant the Kenya Revenue Authority (KRA) broad access to personal data…"
}