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{
"id": 203567,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/203567/?format=api",
"text_counter": 225,
"type": "speech",
"speaker_name": "Mr. Billow",
"speaker_title": "",
"speaker": {
"id": 260,
"legal_name": "Billow Adan Kerrow",
"slug": "billow-kerrow"
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"content": "application, the Commissioner of Tax, or the Kenya Revenue Authority (KRA), can actually freeze the bank accounts of people who are suspected of not having paid taxes, or people who are suspected of having made taxable supplies on which tax has not been charged, or people who have collected taxes but may not have remitted it. I think the power to freeze the accounts of individual taxpayers merely on the basis of the reasonable assumption of a Commissioner of tax, or the KRA, before assessments are issued, is tantamount to an abuse of law. The current legal provisions are such that there has to be an assessment which is issued by the KRA, which then determines what tax you are supposed to pay. Then after assessment is issued you pay tax. As the law provides now, the KRA can go ahead and do all those things, but it is based on the assessments which have been already issued. I think to give the KRA powers to go and freeze bank accounts and to transfer and sell property of taxpayers merely on assumption that a person has not complied with tax provisions, is to allow abuse or misuse of the powers by the KRA. It is going to be dangerous! That is one of the things that are of major concern to us. It is against the spirit of tax legislation. Mr. Temporary Deputy Speaker, Sir, that provision, as a matter of fact, disregards the whole concept of assessment of income tax. Assessment forms are the legal basis upon which tax is collected. Therefore, in my view, that section which empowers the commissioner to transfer properties or freeze accounts of taxpayers, clearly gives excessive powers, and are subject to abuse, because their use will be based on the whims of the individual tax commissioner. This is a country 3982 PARLIAMENTARY DEBATES September 18, 2007 in which political expediency sometimes determines some of the operations of some of the civil servants. In this regard, therefore, I find that clause to be really unacceptable, and it should be subject to amendment when we come to the Committee Stage. The important thing, if the KRA wants to operate, is that currently it has legal provisions, administrative procedures and investigations department, which can carry out all that work before they can resort to this measure. I think it is important that they should not be given these powers, because doing so is against the principles of natural justice. The second point I am concerned about is on the 120 per cent duty on plastics, which is provided for in this Bill. This provision is likely to kill some of the industries that employ a large number of people, and already a lot of concerns have been expressed that some of the industries are already in the process of folding up because of this provision. I think the issue of plastics is an environmental issue, and the Ministry of Environment and Natural Resources, the way I understand it, has already come up with an arrangement where they will levy some money on those manufacturers, so that they can use that levy to address the environmental hazards that come from the use of plastics. What will happen is that the 120 per cent duty will automatically be passed on to the consumer and will have no effect in controlling the environmental hazards that are the target of this proposed law. Consequently, I am of the view that this 120 per cent tax on the plastics, really, is misplaced and this matter should be left to the Ministry of Environment and Natural Resources; to address the concerns that it seeks to address. Mr. Temporary Deputy Speaker, Sir, thirdly, I am also concerned about the 40 per cent duty on hides and skins for export. I think this is intended to assist tanneries in this country, so that we do not have hides and skins going out. The people in the livestock sector, particularly the pastoralists, are suffering, because they do not get value for their hides and skins from the tanneries. Increasing this duty, which was 20 per cent, to 40 per cent, hurts the pastoralists, and the farmers who need returns on their hides and skins. They are not going to get returns from the tanneries, because we seek to address the concerns of the tanneries but forget about the concerns of the farmers. Therefore, it is important for the Minister to also review his decision on this matter. On the issue of the licences that are being revoked, and I find it a very good thing for the Minister to revoke some of those licences which are hurting businesses in this country, when you go out in the rural areas, the cess which is being collected by the local authorities is also hurting many people and it needs to be addressed. A clear example is that when you are transporting livestock from one county to another, you have to pay tax in every county that you have to go through. That is really discouraging farmers, and is becoming burdensome to the economies of the people who are engaged in that business. It is important that we address the taxes, licences and cess which is collected by the local authorities in addition to those ones which are being revoked at the Central Government level. Mr. Temporary Deputy Speaker, Sir, on the amendments which are proposed to the Central Bank of Kenya Act, or, first of all, to the Banking Act, the Minister is ceding some of his powers to the Governor of the Central Bank of Kenya (CBK) in terms of the regulatory aspect of the monetary market, and I think it is appropriate for the Minister to cede some of his powers. But what he has done is on the one hand to cede some of those regulatory powers to the CBK and on the other hand take away those powers through appointment, for example, of a Chairman of the Board of directors of the CBK. I find that to be completely unacceptable. The CBK is an institution that is responsible for the monetary policy of this country. In this regard, it must remain independent from the Government, the Executive, in terms of its decisions on the monetary policy. This is a tradition across many countries in the world. In the majority of the countries in the world, the chairman of the board of directors of the central bank is the governor himself. I think the reason is because if you have a chairman, then there is a risk that he will actually direct the September 18, 2007 PARLIAMENTARY DEBATES 3983 governor to do this or that and, therefore, influence the monetary policy or operations of the bank. The chairman, according to the proposal in the Bill, will be appointed by the President on the advice of the Minister. In other words, the Minister will literally control the operations of the CBK through the appointment of the chairman. This is not acceptable and is going to affect the independence of the CBK and the stability of the financial market. We have seen problems in the past when the CBK has not been independent; when the Governor had no security of tenure. We have seen a situation where the CBK was misused and got engaged in printing of currency in excess of the money supply requirement. What we see here is going to take us back to those days. Let us leave the CBK to be independent from the Executive, in terms of its operations. Let us not have a chairman appointed by the Executive to oversee the operations of the Governor. The Minister says that the reason he is doing so is so that he can de-link the Governor of Central Bank of Kenya (CBK) from running the affairs of the Board. I think the Governor of the CBK is the Chief Executive of this bank. The main responsibility of the CBK is the monetary policy. I, therefore, think it is wrong--- In this regard, I would like to say that those are some of the things that we will not accept, because it is dangerous and risky. Mr. Temporary Deputy Speaker, Sir, again, I have another problem in this regard; where the Minister says that the CBK should support the economic policies of the Government. It is true that the Government has an economic policy and the CBK should support that policy. But I think the provision in this Act says:- \"Where the Minister is of a different opinion as regards the monetary policy---\" Mr. Temporary Deputy Speaker, Sir, let me explain it better. This Bill provides that, every six months, the Governor of the CBK should submit to the Minister a written monetary policy of the CBK, and the Minister shall table those policies in this House. But the Bill also provides that if the Minister is concerned that the monetary policy pursued by the CBK is not acceptable to the Government or in principle, it is not consistent with the objectives of the CBK, then he can reject it. Therefore, the Government, through the Cabinet, can actually direct the CBK to change that monetary policy. That is the provision he has in this Bill. I find that a bit risky; where the CBK can be directed by the Cabinet to pursue a specific policy. It should not be accepted."
}