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"id": 216567,
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"speaker_name": "Mr. Omingo",
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"legal_name": "James Omingo Magara",
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"content": "Thank you, Mr. Temporary Deputy Chairman, Sir, for giving me a chance to contribute to this Motion regarding the taxation measures that were proposed by the Minister for Finance. I am, actually, a tax man by training, and I will start from where it bites most. I did not hear the Minister propose a reduction on the general taxation in terms of Pay As You Earn (PAYE) where poor Kenyans suffer most. That is simply because the Minister has lost it all in terms of the use of the PIN system. It is also because the Minister, as somebody said, was so bold in his thinking, but reduced it by partnering with Master Trevor Kibet; \"to just watch the economy grow as opposed to facilitating it grow through major reforms.\" Why am I saying that? It is because the taxation measures in terms of PAYE for the poor fellows who earn meagre salaries should have come down to encourage a bit of saving. When taxes are reduced, we encourage surplus funds to be invested for the purpose of development. I think that is where the Minister missed the point. It could have been very easy. If he had sought advice, I could have given it to him. We need to spread the tax base by using, effectively, the PIN system, by thinking outside the box as opposed to a traditional way of VAT bill-payer or the person on the payroll continues to pay year in, year out. Having said that, Mr. Temporary Deputy Speaker, Sir, let me go back to what he has actually proposed. One issue that is quite an irritant to some of us who are in the sugar sector, is that he did not factor anything in terms of relieving debts, injecting some capital or writing-off debts in the sugar sector and, yet he went further to actually reduce or remove import duty on industrial sugar. Kenyans must wake up from this traditional thinking, that we are, actually, making a Budget for a particular interested group of people in the system. We know that the big sharks who are industrialists and who consume sugar are the patrons of the system, as we talk. It is high time that we walked out of budgeting for our friends and for the good boys as opposed to encouraging our farmers who suffer most in line with the cost of our inputs, and yet we are importing industrial sugar which is much cheaper than to what is manufactured locally. I would like to move to the issue of the IDF. I liked the issue of the Minister reducing tax on the IDF by 0.5 per cent. However, that in itself gave a blanket exemption. I want to share the sentiments by hon. Prof. Anyang-Nyong'o that we must not give a blanket exemption to everybody. 2148 PARLIAMENTARY DEBATES June 28, 2007 We must remove tax only on what we essentially require to import and encourage people as opposed to giving a blanket exemption that makes even luxuries part of the reduction of cost. It is also important to note that the Government needs also to discourage, as Prof. Anyang-Nyong'o said, luxurious expenditure. This will reduce imports and what we are trying to do, essentially, is to reduce drain on foreign exchange because we know that we import using foreign currency. There is the issue of duty on medical equipment. It is one thing to take a measure like this but it is also important for the Minister to ensure that, in terms of reporting procedures from the Ministries involved, this benefit is truly transferred to the consumers. More often than not, these reductions are meant to enrich, for example, the importers, through reduced cost but the effect of it is not transferred to the consumers. Mr. Temporary Deputy Chairman, Sir, I want to go to the issue of cigarettes. To some extent, I want to encourage the Minister because in terms of thinking forward and backwards, if you prohibit smoking, inasmuch as you want to make money out of it, you are also reducing consumption of cigarette to the extent that the budget allocation for the Ministry of Health on smoking-related issues is reduced. This is one thing we must encourage. For the smokers, this was a fairly modest increase that needs to be streamlined further. In terms of the local effects, the Ministry of Health will save on the medical bills that go into it. On the issue of second-hand vehicle spare parts, truly, it is an insult, to suggest - and I heard the Minister say this when he read his Speech - that it is second-hand vehicle spare parts that are a cause of deaths on our highways. They are not. The major cause of accidents on our roads is the poor state of our roads. The unfortunate thing is that those people who are supposed to address the issue of roads - I think each one of them has a chopper. They do not care because it is the common man who uses the roads. Some of them are still buying choppers and I know that the Minister could be enjoying one from where he is. Let us address the issue of our roads. Let us address the cause of road accidents as opposed to the symptoms. We need to address the issue regarding the state of our roads in order to reduce road carnage. We should not have an issue with used motor vehicle spare parts because as I said, those people who are well-to-do are the ones who can afford brand new cars. The majority of Kenyans, who are poorer than they were four years ago, cannot afford the luxury of brand new cars from the showrooms. I think this is in essence, a way of protecting the multinationals which are already operating today within the country. We need to understand the fact that the general population suffers in the hands of these exploiting multinationals. Therefore, we want the Ministry to reduce it or remove it all together because we could shoot it down. This is one thing that we need to challenge and move forward. There is the issue of non-taxable pension. It is time that Kenyans appreciated what the Minister has done in this regard. We need to recognise the senior citizens who have given their all. That is an encouraging move to encourage those who have given us service so that we do not utilise that particular effort that they gave us to pay ourselves even after we failed to reward them. Ordinarily, pensions are meagre payments. So, to demand again tax from them is actually an insult to their services. It reminds me of an analogy of a sugar-cane chewer. If he or she chews sugar-cane and when the juice is over, you drop the remains. We do not want to treat our senior citizen like sugar-cane waste. We need to recognise their efforts. Mr. Temporary Deputy Chairman, Sir, in as much as the Minister tried to harmonise the issue of EAC, there are other issues in terms of comparativeness that we must also appreciate, including the job opportunities. I thought the Minister should also have encouraged harmonisation of our education system in East Africa so that we can export labour which is comparative from the three countries so that our people can earn dividends in Tanzania and Uganda if only, we had the same level of education standards. June 28, 2007 PARLIAMENTARY DEBATES 2149 With those few remarks, I support."
}