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"id": 203570,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/203570/?format=api",
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"type": "speech",
"speaker_name": "Mr. Kipchumba",
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"speaker": {
"id": 313,
"legal_name": "Joseph Kipchumba Lagat",
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"content": "Mr. Temporary Deputy Speaker, Sir, I rise to make my contribution to this very important Bill. Just to start from where my colleague left, the increase in tax of 120 per cent on plastic bags is punitive. But that is not the main issue. The issue is that there are some plastic bags which are not even a threat to the environment. We go to the supermarkets and, therefore, know that the big plastic bags are not a threat at all to the environment. Therefore, the Minister for Finance should have consulted widely and, especially, with the experts on environment. To the extent that many Kenyans have now lost jobs, I think this particular clause should be deleted completely, because we do not quite require it. Mr. Temporary Deputy Speaker, Sir, there is also the issue of spare parts. There is no reason for raising duty on second-hand spare by 20 per cent. This is quite a substantial amount of money to the extent that now we are punishing the poor segment of our society. While the Minister at one stage is talking of improving the living standards of Kenyans, on the other hand, he is increasing duty on second-hand spare parts by 20 per cent. These spare parts are very beneficial to us, especially the farmers who use them on tractors. But more importantly, how do you determine the price of these second-hand spare parts before you impose a 20 per cent levy on them? Who determines the price of these second-hand spare parts? It is very easy to determine the price of new cars, because all you need to do is to go to the manufacturer and he will give you their cost price. But it is difficult to determine the cost of second-hand spare parts because, first, we do not know how they were used and how they have been improved. Therefore, it would be very difficult, indeed, to determine the actual value or cost of second-hand spare parts and, hence, levy duty on the same. I would, therefore, urge the Minister to completely remove duty on second-hand spare parts. I think we are unnecessarily punishing the poor lot in this country who want to benefit from the second-hand spare parts. This is because the cost of second-hand vehicles will also go up. Mr. Temporary Deputy Speaker, Sir, hon. Billow raised the issue of the Kenya Revenue Authority (KRA) having power to sell one's building if he or she delays or defaults paying duty on the same. I think it is extremely serious to allow the KRA to sell one's property because that person owes them some duty. If you read Clause 11, it even talks of suspicion; that if the Commissioner of Tax suspects that you have not paid the requisite duty, then they could even auction your property. To expect Kenyans to accept that their property can be auctioned or sold on suspicion, I think it is demanding too much. I think that clause should removed all together. We all know that there are some mischievous officers in the KRA who can take advantage of that clause. It has been stated clearly in black and white that if there is suspicion that you owe the KRA some duty, then your building can be sold. I would urge the Minister to consider very seriously deleting that particular clause. Mr. Temporary Deputy Speaker, Sir, the Minister has again talked about waiving duty on construction material for private universities. That is a very good gesture, but what happens to the public universities? We are all aware that, currently, our public universities raise funds from within their institutions with which they use to expand. I think the objective of encouraging private universities to expand is, so that many of our students can be absorbed in them. However, a majority of our students are absorbed by public universities. Therefore, I would like the Minister to extend the waiver to the public universities. September 18, 2007 PARLIAMENTARY DEBATES 3985 Mr. Temporary Deputy Speaker, Sir, on Clause 14, the Minister talks of taxation on business premises. That will make the cost of rent very high. He should consider whether it is really cost-effective to increase duty or to tax these private premises. I think the whole essence of this, is to reduce the cost of doing business. Therefore, by taxing private premises, we will be, in effect, increasing the rent on the said premises. I want to urge him to, probably, if not reduce it, but to waive it completely. If businesses boom, then we can collect more taxes. Therefore, there is no merit in us taxing the said buildings because it discourages new businesses. Mr. Temporary Deputy Speaker, Sir, on pension, the Minister has talked about the waiver that will be given on pension of retirees who are over 65 years. That is, indeed, welcome. However, are we going to give a waiver to the retirees on any amount of pension or are you going to give a waiver for a certain amount of money received? We must be very categorical. If there are retirees who are over 65 years old that are earning a lot of money, are we going to give a waiver to people who are earning quite substantial amount of money? Mr. Temporary Deputy Speaker, Sir, the issue of imposing duty on hides and skins, in my view, is a very noble idea. I think also the Minister should include wool in this category. This is because hides and skins and wool are, probably, in the same category. Therefore, I would want to differ with my colleague that we reduce duty on hides and skins. We want to increase the value of these products. There is no merit anywhere in the world for anybody to export raw materials. Raw materials have been exported from this country since time immemorial. However, no value has been achieved from the same. Therefore, I want to request the Minister to include wool. There is a shortage of wool in this country. Most of it is exported outside. Mr. Temporary Deputy Speaker, Sir, in Clause 31, the Minister makes a provision that residents of East Africa are now recognised as residents of Kenya and, therefore, they will receive some waiver like any other Kenyan. That is a very good gesture. However, I want him to ensure that Kenyans who operate in Tanzania and Uganda also receive the same treatment. We do not want Ugandans and Tanzanians to enjoy benefits in Kenya while our people who operate in those countries are not accorded the same treatment. Therefore, I want to kindly request that the Minister ensures that Kenyans are accorded the same treatment in Tanzania and Uganda. Mr. Temporary Deputy Speaker, Sir, something that I want the Minister to seriously consider is the issue of increasing insurance capital. For example, life insurance has been increased from Kshs150,000 to Kshs400,000. I do not see any merit in him doing so. I want him to listen to this very carefully. When this Government came to power, they talked about assisting the banks and insurance companies, so that they can develop and, in turn, help Kenyans who do not have substantial capital to start businesses. It is, therefore, absurd that five or four-and-a-half years down the line, we are doing the exact reverse. We are now increasing the capital requirement of life insurance from Kshs150,000 to even Kshs400,000. They are now increasing it for banks in that they are now required to increase their capital from Kshs250,000 to Kshs1 billion. I want the Minister when he responds to explain to this House and the country at large why, indeed, he wants us now to increase the cost of doing business in this country. Banks are now doing very well because they can charge a lower interest rate given that quite a lot of money is being left idle. Now, they want to ensure that Kshs750 million extra will lie idle somewhere in Central Bank of Kenya (CBK). I raised this issue last time. I said that, probably, the friends of the Minister have all started their banks. They are now okay and have no problem. The Minister now feels that these fellows should not receive any further competition. Indeed, he should protect his friends, so that they can do business and make more money. Allow any Kenyan who wants to own a bank and who has ambition and who can raise Kshs250 million to start a bank. There is no merit in raising this figure. We can say anything, but competition in this country is very healthy. To increase competition, we must encourage more players in the industry. Therefore, I strongly hope that the Departmental 3986 PARLIAMENTARY DEBATES September 18, 2007 Committee on Finance, Planning and Trade will ensure that this is deleted completely from the Finance Bill. I am sure that the Minister will not give us any reasonable excuse as to why he wants to increase that amount. Mr. Temporary Deputy Speaker, Sir, my final remarks are on allowing Kenya Revenue Authority (KRA) to become the collector of revenue on land rates. The Ministry of Lands understands land issues better than KRA. The KRA is very punitive in their imposition of penalties. You and I know that it is the people who own land. These are poor Kenyans who vote for us. They take time to raise this amount of money. We need to understand where they are coming from. At times, they are unable to raise the little land rates we are talking about. For a long time, the Ministry of Lands has had a way of dealing with these fellows. They know and understand their psychology. They have some certain agreements and arrangements on how they can pay the money in instalments, but KRA does not understand. The KRA will come and demand that we pay the rates. If you delay by a single day, they impose interest not on a simple basis. We will pay interest to the extent that our farmers and poor Kenyans will lose their land. I would want this particular Clause 39 to be deleted completely. I would suggest that the act of collecting revenue reverts back to the Ministry of Lands. These are the people who understand farmers and their problems. They can allow them to pay their land rates slowly without being harassed. We have all dealt with the Kenya Revenue Authority (KRA). It can demand anything from you and the next day, you are taken to court. After that, they can even sell your piece of land. We do not want our fellow Kenyans to lose their land. I do not understand why the Minister has come up with very punitive regulations. The KRA is supposed to be a friend to every Kenyan. Every Kenyan is supposed to pay taxes on a compliance level. We are supposed to comply to pay taxes. The KRA is not supposed to facilitate your businesses to fall. It is supposed to facilitate you, so that you can pay more taxes. But many of these regulations that have been made by the Minister are meant to penalise us, so that our businesses could collapse. I do not understand whether the Minister knows that, if those businesses collapse, the Government will have no revenue to collect the next day. I totally agree with the sanctions on the Capital Markets Authority (CMA). I have no problem with that. But the CMA must be made effective. It is one thing to make law and another to act on the same. Mr. Temporary Deputy Speaker, Sir, the issue of log books for vehicles which have been written off is a very good gesture. Many Kenyans own log books for vehicles which have been written off and yet, that can be a security risk. I want to applaud the Minister on that. We are now moving to a situation where many Kenyans will be trading in the stock exchange. If we do not have sufficient regulations to safeguard their money, many Kenyans will, indeed, lose their money. The issue of increasing pension to Kshs2,000 is welcome. But an increment of 3 per cent is probably on the lower side. The rate should be commensurate with inflation levels. If we are given 3 per cent and the inflation is 15 per cent, we will still be quite disadvantaged. I have raised this issue in this House very many times. The Minister should be forward-looking. He should consider amending the Act, so that we can all contribute towards our pensions. Pensions should be contributory. I have said here before that the pension that this Government pays today is over Kshs20 billion. What will happen by the time our pension will be Kshs100 billion and our revenue Kshs100 billion? It will create a crisis in this country. We will be using all the revenue collected on pension. Therefore, instead of doing all these small businesses here, the Minister should consider being proactive and bring an amendment to make pensions contributory. Mr. Temporary Deputy Speaker, Sir, with those few remarks, I beg to support."
}