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{
"id": 180326,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/180326/?format=api",
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"type": "speech",
"speaker_name": "Mr. Michuki",
"speaker_title": "The Minister for Environment and Mineral Resources",
"speaker": {
"id": 183,
"legal_name": "John Njoroge Michuki",
"slug": "john-michuki"
},
"content": " Mr. Temporary Deputy Speaker, Sir, to further consolidate the growth of our construction industry, and to accelerate the ongoing infrastructure development, I proposed to reduce Import Duty on cement from 40 per cent to 25 per cent, to make that product affordable to the users. Our telecommunication and information technology sub-sector has expanded significantly over the last five years, creating enormous economic and employment opportunities to Kenyans. In particular, and in order to further encourage investment in modern telecommunications so as to reduce costs and improve efficiency in the telecommunication network, I propose to remove Import Duty on telecommunication equipment altogether. The prices of food have increased over time. In the previous two Budgets, I zero-rated VAT on wheat flour, maize flour and milk, among other measures, to reduce the cost of living. I propose to further zero-rate VAT on bread and rice. The suppliers of those products are expected to appreciate the hardship being faced by Kenyans and pass the benefits of these measures to the consumers through reduction of prices of those basic commodities. Mr. Temporary Deputy Speaker, Sir, Kenyan artists and sportsmen have continued to put this country on the world map. Through their good performance, those young men and women are, sometimes, required to pay tax on their earnings in the countries where they have derived the income. They are also required to declare in Kenya and pay tax on their income earned abroad, which amounts to double taxation. To correct that tax anomaly, I propose to allow the tax paid abroad to be off-set against tax payable in Kenya, provided that the person furnishes the evidence of payment of such tax in other countries. That measure is aimed at boosting the morale of those patriotic Kenyans and other aspiring sportsmen and women. Mr. Temporary Deputy Speaker, Sir, in order to encourage people to clear their tax arrears, we sometimes accumulate more than the principle tax. I proposed to restrict interest and penalties accrued to not more than 100 per cent of the principle tax due. That is similar to the in duplum rule in the banking sector, which was introduced in the recent past through what you may call \"The Donde Bill\", that was amended and approved by this House. The Insurance Act restricts the amount of money that an insurance company can invest in shares, debentures or loans, or in any one company, to 5 per cent. For those long and general insurance businesses, the insurance companies have argued that shares floated on the Nairobi Stock Exchange are secure and provide good returns on their investments. In order to address the concerns raised by the insurance sector, I propose to increase the level of investments by insurance companies in the shares of corporate bonds of financial institutions from 5 per cent to 10 per cent. I am sure that the insurance companies will take advantage of the forthcoming privation November 11, 2008 PARLIAMENTARY DEBATES 3351 programmes. Mr. Temporary Deputy Speaker, Sir, the annuity market is not competitive due to lack of information that would enable members of determined benefit schemes to identify a good annuity provider when they retire. To address that problem, I propose to introduce a requirement on annuity providers to publish on a quarterly basis, information on annuity products and the rates thereof, in a manner to be prescribed by the Commissioner. That measure will go a long way towards helping retirees in choosing any annuity providers with better terms. The recent collapse of a number of stockbroking firms, largely on account of mis- governance, has adversely affected the confidence in the capital market of Kenya. In order to rein in those wayward stock brokers and improve corporate governance in those institutions, there is need to introduce greater professionalism and accountability for fiduciary obligations imposed on directors and senior management. In this regard, I propose to bar any person who controls directly or indirectly, 25 per cent issued share capital, among other things, from holding a management position in that company. I further propose to introduce a 25 per cent maximum shareholding by any one person in those companies. Mr. Temporary Deputy Speaker, Sir, in order to further ensure that stock brokers do not mismanage investors' funds and get away with it, I propose to empower the Capital Markets Authority (CMA) to trace and freeze the assets owned by owners of those companies upon reasonable suspicion of involvement in fraudulent activities. I also propose to recognise stockbroking agents in the capital markets, and increase responsibility on their actions in stockbroking companies they act for. Investors have been put into great suffering as a result of delayed refunds, particularly with regard to the recent Safaricom Initial Public Officer (IPO). In order to ensure that investors get their refunds at the right time, I propose to amend the Capital Markets Authority Act to clearly define the period within which investors should be able to receive their refunds, in the event there is an oversubscription of the Initial Public Offer (IPO). I also propose to make a provision for interest to be earned by investors in the event their refunds are delayed beyond specified periods."
}