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"id": 216543,
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"type": "speech",
"speaker_name": "Mr. M'Mukindia",
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"speaker": {
"id": 271,
"legal_name": "Kirugi Joseph Laiboni M'Mukindia",
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"content": "Thank you, Mr. Temporary Deputy Chairman, Sir, for giving me this opportunity to make my contribution on the taxation measures that the Minister has proposed in his Budget Speech. Broadly, I will be supportive of the measures that he has proposed. I do not feel that they will become a major tax burden on the country. Therefore, it will be very kind and easy on the pockets of Kenyans. I commend the Minister for being ambitious and courageous enough to move forward in trying to achieve a better economy for our people. Mr. Temporary Deputy Chairman, Sir, having said that, if you look at certain specific proposals, they raise certain queries. One of the things that the Minister wants to achieve is to promote business competitiveness and make imports, possibly raw materials, affordable. There is a proposal to remove IDF, for example, within the East African context. There is also the reduction of IDF from outside East Africa. I agree that, that will improve our competitiveness and make our manufactured goods and some of the imports affordable. Nevertheless, I propose that the Minister looks at the possibility of eliminating IDF in as far as imports of raw materials and capital goods are concerned, even if they come from outside East Africa. That would make our manufacturing sector more competitive. That is because whether we like it or not, the IDF is an indirect tax and it is always passed on to the consumer. June 28, 2007 PARLIAMENTARY DEBATES 2141 Mr. Temporary Deputy Chairman, Sir, I am very supportive of the Minister's proposal to make the East African Community (EAC) one \"country\", as it were. In that respect, his tax proposals on the ability to invest in Kenya by Tanzanians and Ugandans is very welcome. I think Kenya should take the lead in that respect. We should not wait for our partners to make the first step. I congratulate the Minister for ensuring that other East Africans can do business freely in this country. Since we are in a better position than them economically, it is in our interest to be the first ones to take a step to promote inclusiveness of all other East Africans. That, obviously, includes Rwanda and Burundi. That will go a long way to deepen the EAC regional integration economically. Mr. Temporary Deputy Chairman, Sir, I am also very supportive of the removal of taxes on medical equipment, and the proposal to also remove taxes on the setting up of universities. While that is a very positive move as far university education is concerned, you will know that this country is in very short supply of engineers and technicians, especially in the area of ICT. We have also seen in the newspapers that the Communications Commission of Kenya (CCK) has now taken over the Kenya College of Communications Technology (KCCT). But that is only one opening. If a private sector person wanted to set up an equivalent of the KCCT, why should he or she be taxed when we know we have a major shortage of engineers and technicians in this country? To try to drive the economy that we are actually proposing, we need the manpower very urgently. The tax exemption should go beyond universities. It should extend to secondary schools, technical colleges and other professional colleges in the country. It did not go far enough. I think it can go far enough. Really, there is not much that the Minister will lose in terms of revenue benefits. Mr. Temporary Deputy Chairman, Sir, in so far as the housing development is concerned, it is also a move in the right direction. How to manage that to ensure that it only applies to low income housing is a difficult issue. But I wish the Minister well in trying to find a formula to manage it in such a way that we do not lose revenue. Maybe, he should have gone further and tried to exempt the whole housing sector from taxation. That will not only have the impact of creating demand for affordable housing, but it will also go directly to our manufacturing sector. If you look at the housing sector, it touches on virtually every manufacturing sector. If you find a way of increasing the supply of housing, it goes down to the economy and touches virtually every development. Therefore, it will have a major multiplier effect on our manufacturing sector as well. Perhaps, if not this year, maybe next year - I am sure the Minister will be back to this House - he can try to ensure that we go further in linking the housing sector to manufacturing in this country. Mr. Temporary Deputy Chairman, Sir, I also want to congratulate the Minister for reforms in the retirement benefits. I agree with Mr. Lagat that double-taxation is not fair to our citizens. The only area I have difficulties in is; I do not believe that second-hand spare parts cause accidents. I think that needs to be looked into because if that argument were be correct, then we would have said that all second-hand motor vehicles should also be taxed at 20 per cent higher. To me, they represent a bigger risk to our people than small spare parts. I think in terms of principle, the two do not gel. Therefore, there is a problem there. Mr. Temporary Deputy Chairman, Sir, I would like the Minister not to be misled by certain mandarins at the Treasury to take certain measures that reduce the effectiveness of his Budget. Overall, the Budget is wonderful. But when you put in something like that, people start wondering and asking questions which are totally unnecessary. Really I do not see the reason for it. Mr. Temporary Deputy Chairman, Sir, if you look at the issue of batteries; it is a very good idea to put tax on battery exports. However, by the same token, why can we not ban scrap metal exports to promote our local industries? As you know, steel is very expensive to import. If the principle is to reduce export, then let it apply across the board. 2142 PARLIAMENTARY DEBATES June 28, 2007"
}