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{
"id": 1590441,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590441/?format=api",
"text_counter": 371,
"type": "speech",
"speaker_name": "Kikuyu, UDA",
"speaker_title": "Hon. Kimani Ichung’wah",
"speaker": null,
"content": "instead of buying a constructed unit, will enjoy the same benefit of up to Ksh30,000 per month or Ksh360,000 a year. Therefore, Kenyans who are borrowing mortgage facilities from their Savings and Credit Cooperatives (SACCOs), banks and mortgage finance companies will now benefit from this, including us. When I took my mortgage in this current Parliament, I did not buy a house. I sought to renovate an existing house and I have been paying a heavy interest of up to about Ksh180,000 a month. I can now get up to Ksh360,000 a year tax-free. Hon. Temporary Speaker, if you look at other provisions on Pay As You Earn (PAYE), many Kenyans have been overtaxed, largely on account of their employers not allowing them to claim all the deductible expenses ahead of PAYE deductions. This Bill, in one of the Clauses, is now making it mandatory for employers to correctly apply all the deductions that may occasion such over taxation. Therefore, employees will not have to wait until the end of June or in the course of June, when filling their tax returns, to claim tax refunds from the Kenya Revenue Authority (KRA). Now, that will be checked by this particular provision that allows all deductions, exemptions and tax reliefs that were previously unclaimed, to be claimed ahead of paying PAYE. This will not only ease the tax burden but also reduce the workload on Kenyans. Another important aspect is the advance pricing agreements contained in this Bill relating to multinationals operating in the country or that have permanent establishments in Kenya. You can now have an advance pricing agreement between a multinational and its subsidiary, if that multinational is operating in Kenya, to create certainty. Certified Public Accountants (CPAs) will tell you that one of the cardinal principles of taxation is certainty. Multinationals will know at what pricing levels they are able to claim losses for its subsidiary in or outside the country. Many businesses are allowed to carry on their losses. When you make a loss up to five years, you are allowed to carry forward a loss against future taxes. The Bill had proposed to limit this to a five-year period, so that at the end of five years you are stopped from claiming losses against your tax obligations. As the Chair has said, the Committee listened to Kenyans. This is important because Kenyans were asking last year: “Do parliamentarians ever listen to us?” We were accused of not listening. It is actually Kenyans that were not listening to Parliament. Because last year, when the Bill came to this House, the Chair went through the rigorous process he has gone through today on public participation and proposed amendments to the Bill. He has just said that this particular provision is one of the provisions that elicited a lot of reactions from Kenyans through public participation. I must commend the Committee because they did not just do public participation in Nairobi; they went to other counties. From their Report, they went to Kwale, Migori, Nandi, Busia, Trans Nzoia, Mombasa and Kilifi Counties in addition to the public participation they conducted in Nairobi. Across these counties, one of the provisions that elicited a lot of reactions from Kenyans was the provision to stop Kenyans from carrying forward losses. The Committee, in cognisance of the issues that were raised by Kenyans, again like last year, is proposing that we amend and allow losses, on application, to be carried forward beyond the five years. If you set up a business today and make losses for five years, and the sixth year you think you still qualify to claim the losses against future tax obligations, on application to the Cabinet Secretary for the National Treasury, you will be allowed a further period of five years. That is to check the abuse of that process. There are people who make profits but use tax avoidance measures to claim losses into perpetuity. Therefore, the capping of five years can be extended."
}