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"id": 204068,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/204068/?format=api",
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"type": "speech",
"speaker_name": "Mr. Kimunya",
"speaker_title": "The Minister for Finance",
"speaker": {
"id": 174,
"legal_name": "Amos Muhinga Kimunya",
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"content": " Mr. Temporary Deputy Speaker, Sir, I wish to thank hon. Members for supporting Government policies that are aimed at sustaining and enhancing the rate of economic growth in this country. To be more specific, I thank hon. Members for the support they have given to the taxation proposals during this year's Budget, which were exhaustively discussed during the debate on the Budget. The debate on the taxation proposals was passed by this House. September 13, 2007 PARLIAMENTARY DEBATES 3961 Mr. Temporary Deputy Speaker, Sir, we are here today to continue with the debate that was overwhelmingly supported by the House, and ensure that we put into law the proposals that this House has already approved. Mr. Temporary Deputy Speaker, Sir, hon. Members will recall that when I delivered the Budget Speech this year, I stated that the Budget is intended to define the power to facilitate and harness the participation of all Kenyans in helping to build a strong economy and, thereby, help us achieve our Vision 2030 objectives. While still within the first quarter of the fiscal year, I would like to assure this House that we have not deviated from this year's Budget - Vision 2030 - working together on the path to prosperity. Mr. Temporary Deputy Speaker, Sir, as I pointed out in my Budget Speech, the economic outlook for the medium-term is very bright, buoyed largely by consumer and investor confidence and continued strong growth in our trading partners' economies. A growth rate of 6.5 per cent to 7 percent is expected in 2007. As of now, in the first quarter of 2007, we have already recorded a growth of 6.3 per cent. We expect that rate to gradually rise to 10 per cent by the year 2012. Mr. Temporary Deputy Speaker, Sir, the taxation measures that I proposed during this year's Budget are intended mainly to consolidate and accelerate the rate of economic growth, while ensuring that we address the needs of our people. Mr. Temporary Deputy Speaker, Sir, the Finance Bill of 2007 contains various proposals relating to Excise Duty, Valued Added Tax (VAT), Income Tax and miscellaneous fees and taxes. I will highlight only a few of those proposals, as hon. Members will have time to debate the proposals during this Second Reading. Indeed, I want to confirm that we have held several discussions with the Departmental Committee on Finance, Planning and Trade. I am aware that they have tabled their Report. We will continue engaging until we bring all the amendments together during the Committee Stage at some point in the not too distant future. Mr. Temporary Deputy Speaker, Sir, due to high production cost, and in order to encourage growth in the manufacturing sector, I have proposed a number of custom measures. Import Declaration Fees were reduced from 2.75 per cent to 2.25 per cent on all goods imported from outside the East African countries, and no IDF will be charged on goods imported from within the East Africa Community countries. Import Duty of 20 per cent or Kshs10 per kilogramme was also imposed on used lead acid batteries in order to protect the jobs within the battery recycling plants, a measure which is already yielding dividends. I also did propose to increase Export Duty on raw hides and skins from 20 per cent or Kshs10 per kilogramme to 40 per cent or Kshs20 per kilogramme to encourage local value-addition and ensure availability of raw materials for the local tanneries and create employment. Mr. Temporary Deputy Speaker, Sir, in order to discourage the importation of second-hand motor vehicle spare parts, and to ensure the safety of Kenyans on our roads, I also proposed to impose a 20 per cent Excise Duty on all imported used motor vehicle spares. I have also proposed an Excise Duty of 120 per cent on plastic bags and imposed a ban on very thin plastics. Mr. Temporary Deputy Speaker, Sir, in dealing with the issues that were coming out from the consultations with the industry, we also gave the industries adequate time to make the necessary adjustments in terms of their manufacturing processes; to ensure that the banned plastics are phased out with minimum disruption to the production process. The imposition of Excise Tax does not lead to unnecessary issues in terms of its collection. Mr. Temporary Deputy Speaker, Sir, I have also proposed to adjust upwards Excise Duty on portable spirits as well sorting out the destinations to make it internationally acceptable; from Kshs200 per litre or 65 per cent, whichever is higher, to Kshs280 per litre or 65 per cent, whichever is higher, as well as the Excise Duty on wines. It was also adjusted upwards to be at par, at Kshs54 per litre or 65 per cent, basically creating the parity between wines and spirits in terms of the Excise Duty contributed per percentage of alcohol or volume. All those measures are expected to provide equity and integration of all alcohol beverages. 3962 PARLIAMENTARY DEBATES September 13, 2007 Mr. Temporary Deputy Speaker, Sir, I have also made a number of proposals under the VAT Act. All those proposals are positive and are intended to encourage issues either in terms of affordability or in terms of the competitiveness of our goods. Further, I have proposed some amendments to the VAT Act on rental and residential buildings, to just bring those measures into parity with what is happening and to help those who are in residential buildings to recoup input taxes paid through VAT. We have also proposed some measures to revamp the construction industry, especially for the under-privileged, by ensuring that we have provided the right fiscal incentives. Under the Income Tax Act, I have also proposed several measures. Among them is a couple of allowances for the middle income earners and exemptions to ensure that people do have all those incentives to revamp our economy. We are also bringing in our partners within the East African Community (EAC) who invest into the stock exchange. They will be treated just like Kenyans. Mr. Temporary Deputy Speaker, Sir, like I said, we went through this during the Budget Speech itself. We went through this during the debate on the Budget. We went through this during the Motion on taxation proposals. All this has been approved by this House. What we are asking is the approval of this Finance Bill, so that we can implement them and create----"
}