Entry Instance

HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept

{
    "id": 1590456,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590456/?format=api",
    "text_counter": 386,
    "type": "speech",
    "speaker_name": "Kitui Rural, WDM",
    "speaker_title": "Hon. David Mwalika",
    "speaker": null,
    "content": "Furthermore, the Bill proposes tax relief on retirement benefits, which includes gratuity and pensions. Those earning pensions and gratuities have served this country. They have spent their lives working and giving them relief on their pensions and gratuities which will increase their disposable income and help them to live a better life. The Bill also proposes to increase the tax-free per diem from Ksh2,000 to Ksh10,000. Currently, Ksh2,000 per diem is tax-free. You are supposed to remit Pay As You Earn (PAYE) for anything above Ksh2,000 because it is considered disposable income. The Bill proposes to increase the limit to Ksh10,000. You will be expected to pay Income Tax on per diem above Ksh10,000. The Bill proposes major clean-ups in Value Added Tax (VAT) on several items, which are being converted from zero-rated to tax-exempt. These include pharmaceuticals supplies, sugarcane, electric bicycles, among others. The effect is that the prices of those products are likely to go up because manufacturers and suppliers are likely to transfer that cost to the final consumer. However, this is aimed at reducing tax expenditure. Tax expenditure in this country has been very high. In 2023, tax expenditure was Ksh510 billion, of which Ksh332 billion was VAT refunds. Our deficit currently stands at Ksh925 billion. If you remove the Ksh510 billion tax expenditure, for example, our deficit will be lower than expected. Tax expenditures are important because they are incentives for manufacturers and investors who come to invest in our country. Therefore, we can still earn income revenues from VAT, but we need to ensure that our tax expenditures are reduced. The Bill proposes access to financial and business secrets. The National Treasury has been including that provision in all Finance Bills since the Finance Bill, 2023. This is a very dangerous provision because if you sleep in a hotel, KRA can get your data to know where you slept and with whom. KRA will know how much money you are depositing in your accounts. Given that there are other provisions in the Bill, especially on the Tax Procedures Act, which give KRA authority to access that data, as my Chairman and the Committee Members said, this provision and data can be misused. Therefore, we declined that provision. Another ongoing issue is the Export and Investment Promotion Levy, which has not been beneficial to exporters. Exports in the last year increased by 2.5 per cent. If you gross it up using inflation, it does not make sense. The Bill proposes a reduction of the Export and Investment Promotion Levy on iron and steel from 17.5 per cent to 10 per cent. We need to further reduce it to five per cent because when we increased the rates on imported billets and clinker, the prices of cement and steel increased. The price of cement rose from Ksh650 to around Ksh900. The Annual Economic Survey indicates that the construction industry shrunk by 0.7 per cent. The building and construction industry shrank by negative 0.7 per cent. These are the effects of the Export and Investment Promotion Levy which is not helping the country. We also understand that money is not reinvested. Rather, it goes to the Treasury where these people cannot access it. Therefore, we need a further reduction of this. On the five-year cap, the Committee has pronounced itself on tax loss due to carry forwards. It takes five years for somebody to invest in putting up a factory worth Ksh2 billion."
}