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"id": 216568,
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"speaker_name": "Mr. Mungatana",
"speaker_title": "The Assistant Minister for Justice and Constitutional Affairs",
"speaker": {
"id": 185,
"legal_name": "Danson Buya Mungatana",
"slug": "danson-mungatana"
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"content": " Mr. Temporary Deputy Chairman, Sir, I want to thank you for giving me the opportunity to make a few comments on this Motion. First and foremost, I want to say that the taxation measures and proposals that have been given by the Minister must be supported. They are commendable but as always, a good idea can always be made better. Mr. Temporary Deputy Chairman, Sir, if you look at the Import Duty measures, the Minister has proposed that there will be no IDF to be charged on goods imported from the EAC partner States. If you come to the Income Tax measures, the Minister has proposed that in order to treat the other citizens of the EAC partner States who invest in Nairobi Stock Exchange and earn dividend income, the rate of withholding tax should be reduced to 5 per cent like Kenya's. This brings up the whole question of Economic Partnership Agreement (EPA). How does Kenya relate with other nations? When we are giving these exemptions in the IDF, and then we are giving the general withholding tax to be 5 per cent like all other East African countries, what is it that Kenya is gaining from the other side? This is a very important issue because sometimes we might make extremely good proposals that turn up to jeorpadise our own people. We are giving advantage to the other States. In as much as we are in the East African Community, we want to know what it is that they are also giving us. If we say that there is no IDF on all goods imported from the EAC partner States, what is it that Uganda or Tanzania is giving us? Is it only us giving then our business people suffer those charges when they go to their country? I would suggest that for the comfort of the hon. Members in the House, it would be important for us to know what it is that they are also giving in return for what we are doing in this country. Otherwise, we stand to lose and continue to do so. Mr. Temporary Deputy Chairman, Sir, on the stock exchange, for instance, we are giving them the same rate of withholding tax of 5 per cent in Uganda and Tanzania, just like in Kenya. But if you look at the structures of the stock exchange in Kampala, they are still using manual systems. They still write things on paper. It takes such a long time. They have not invested in the CDS accounts like we have done and yet, the Ugandan who is going to trade in Kenya will have the same benefit like the Kenyan who is trading here and yet, we have improved our infrastructure and they have not. So, why should they benefit like us? So, I think in some of these measures involving other countries, particularly the EAC, we must put some form of standards so that when we are imposing the measure, it is not only them who are benefiting, to the detriment of our community. Mr. Temporary Deputy Chairman, Sir, to even get your income back from Uganda after you have put in your money in the stock exchange, it can even take a whole month. Their procedures are ridiculously slow like we had so many years ago but we have left there and proceeded. The measure that has been proposed for medical equipment to be tax-exempted when they come to Kenya must be supported. But we have to make a distinction. We have private hospitals in this country which are also licensed. We also have Government hospitals which are licensed. If you say that all of them that are importing medical equipment are all going to be exempted, the Minister should consider trying to distinguish the two. What is the difficulty in established private hospitals like the Aga Khan Hospital, Nairobi Hospital and other hospitals which are making a lot of money in this country, paying proper tax? We pay a lot money for the services they give us. Why should they be treated the same way in importing medical equipment like my village hospital; Ngao Sub-District Hospital? Why should it be the same? I think the support Ministry staff should have definitely distinguished the two, so that those who are able to pay, should be made to pay it. That should be the spirit with which we move. 2150 PARLIAMENTARY DEBATES June 28, 2007 Mr. Temporary Deputy Chairman, Sir, when the proposed measure on taxation to save our environment and to stop the degradation of the environment was made on 120 per cent, we all cheered because we are fully in support of that measure. But what happened? The next day, those importers of thin plastics passed the same to the consumer. The consumer is not the person we are targeting. In fact, even the stocks that are high up on the sea and those inside the godowns, they end up making profit on us. While we were clapping here, we were thinking that we were hitting at them while, in fact, the Minister was hitting at us. We need to find a way of hitting the target where it hurts. We must be able to find a taxation measure, maybe, even in the licensing of these people, so that if somebody is talking about the importation of plastics, for example, he should be hit as a business person, and be prevented from passing that burden to us. This is because the idea here is to prevent those plastics from coming into this country, and not for them to still come into the country the way they did last year, and at the same time we pay more for them. If that happens, we will miss the point. So, I throw back the challenge to the Minister. He has to think again of a way of stopping these plastics from coming into this country. How are we going to discourage the plastics from coming into this country? One of the ways that he could think about is to encourage the growth of local packaging. He should give tax exemption to the local packaging industry, so that it can grow and become more attractive to the business people to invest in, instead of importing plastics. So, I think more thought needs to be put into this, if our aim is to discourage the degradation of the environment. Mr. Temporary Deputy Chairman, Sir, finally, I want to thank and support the Minister for zero-rating duty on building materials that are used to build universities and student hostels. This is a good measure that will help us in the education sector, particularly, in the higher education sub- sector. However, what is it that the Minister has put in place to ensure that this is not abused?"
}