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"speaker_name": "Mr. Kajwang",
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"content": "Thank you, Mr. Deputy Speaker, Sir, for giving me this opportunity to contribute to the Budget Speech. I want to pick on only two issues which I think I have a serious problem with. The Minister properly spoke about promoting agricultural productivity and rural development for poverty reduction. That is a beautiful statement. It actually says: \"That these reforms would be targeted towards encouraging value addition in agro-processing and making agriculture the catalyst for our economic transformation and prosperity.\" That is also a good statement. But, the taxation measures that he has proposed negate this preposition. He says that we need value addition and we need to promote agro-processing. First of all, I do not need to emphasise that this is the engine of our development and that it will create employment for our people. However, what are the proposals he made in taxation? Mr. Deputy Speaker, Sir, one of the things we can add value on is the production of alcohol, which is also referred to as ethanol in scientific terms. We only have two factories which deal in that. We have the Muhoroni Agro-Chemical Factory, which has been producing ethanol since it was created. I want to underscore the fact that it is called an \"agro-chemical\" factory because it is an agro-processing plant. The other one was started recently and is called \"The Molasses Factory,\" which also got its name from a by-product of the processing of sugar. These two industries employ many of our people and create wealth because the ethanol they produce is sold abroad and locally. What is the result of this? There are some industries which produce wine. They produce wine using our produce from our firms. However, those industries are also agro- based when they produce wine, whatever they produce it from. Some countries produce wine and that is what sustains them. If you go to Spain and France, you will find that the basis of their growth was on agro-processing and wine. Portugal has also benefitted from this. However, looking at the taxation measures that the minister proposed, he has said that he is increasing the taxation on wine from Kshs54 per litre or 65 per cent to Kshs85 per litre or 65 per cent. Whether the wine is produced in the country or in a foreign country, it does not matter. As for the spirits that are produced in this country, he proposed to increase the tax of portable spirits from Kshs200.40 or 65 per cent to Kshs280 or 65 per cent. What I am trying to say is that we are taxing the industry that employs our people and that creates wealth. We are not only taxing it, but we are increasing the tax to 65 per cent. We are, in fact, discouraging the production of ethanol and wine. There are many industries in this country. However, I know of only one that actually uses the portable spirits and wine as raw materials. They buy the spirits whose taxes have now been increased to Kshs280 per litre. They also buy the wine whose tax has now been increased from 54 per cent to 82 per cent. They mix them and create something called fortified wine. The fortified wine tax has now been increased by almost 200 per cent. Essentially, what we are doing is to kill that industry. What we are doing is to tell Keroche Industries in Naivasha, which employs many people, to stop production. This is because its product will cost 200 per cent plus from its original price. Imagine that this kind of drink which is called fortified wine is for the low class in our society. These are the people who cannot afford spirits and wine. It is available to a certain class of our people. Mr. Deputy Speaker, Sir, I do not want to go to the morality of it; whether people should drink it or not. That is not our job as a Parliament. However, if there are some people who want to drink and they can afford a certain drink, and their competitors are producing it and they are not as taxed as they are, we are saying that their competitors should sell and then they should close down. June 26, 2007 PARLIAMENTARY DEBATES 2023 Essentially, this proposal is intended to benefit Kenya Breweries Limited (KBL) and to kill Keroche Industries. Yet, we all know that the KBL is an international company. First of all, it is a multinational, while Keroche Industries is a local industry promoted by some poor Kikuyus who started from very low positions and now they have grown into a big industry. What are we trying to do? We are trying by the stroke of the pen, to kill one industry and build another one. Just to show the consistency of the Minister for Finance in killing this industry, last year, it was proposed that the fortified wine would be increased by 40 per cent. The policy was targeting one industry only because there is no other one which produces this fortified wine. What are our people going to drink if they want to drink something good and hygienic, but not too costly? Last year, the Minister reduced the taxes. In fact, he zero-rated non-malted beer. He told us that it was intended to provide our people, who could not afford the malted beer, with something to drink as an alternative. However, the fortified wine is in that same class, but we are increasing its tax by 200 per cent and zero-rating the non-malted beer. What are we saying? We are saying that by the stroke of the pen we are promoting KBL and killing the local industry. For how long shall we work for multinationals in this country? For how long shall we suffer from neo-colonialism in this country? There will come a time when we must support our own people who invest in industries in this country. These are the people who build big industries from scratches. We should not kill the initiative of our own people. Mr. Deputy Speaker, Sir, at one time, it was the banking industry. Another time, it was the insurance industry. Now, it is the beer and wine industry. We are killing our own entrepreneurs and our own industrialists and promoting multinationals in this country. It is 44 years since Independence. Let me tell you that it does not matter who does it--- There is no tribalism in it. What is in it, is only one thing; that either you are a multinational or an indigenous person in this country. Something must be done, so that our people can also have access to a drink that they can afford. We should not enact laws for individual industries, so that we kill them and, at the same time, promote multinationals. The second item which I wanted to address, if you add me one minute, is the plastics taxation measures. First of all, the Minister says that he is banning a certain type of plastics. I checked the word \"banning\" from the dictionary and I found that it means \"prohibiting.\" I do not think it is the job of the Minister or the Government to ban anything, even if it is bad unless it hurts health like cocaine. But they will have to bring the issue to the House and explain to us why they must ban it. This word \"banning\" is a Provincial Administration language which was banning night and day meetings. This is not the time for banning things. It is the time to tell us why. Somebody must be creative enough. If the Minister for Environment and Natural Resources was in here, I would have asked him to be more creative than merely banning. What could they do? You merely put a levy and use it to collect the waste. By doing so, we will be creating employment also. We need to create employment as we produce and collect the waste. Thank you, Mr. Deputy Speaker, Sir. I support."
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