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{
    "id": 235371,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/235371/?format=api",
    "text_counter": 514,
    "type": "speech",
    "speaker_name": "Mr. Kimunya",
    "speaker_title": "The Minister for Finance",
    "speaker": {
        "id": 174,
        "legal_name": "Amos Muhinga Kimunya",
        "slug": "amos-kimunya"
    },
    "content": " Mr. Temporary Deputy Chairman, Sir, let me first of all state clearly that the proposed increase is not on one category as insinuated by the hon. Member. The increase affects Categories B and D. Basically, what we are saying is that within the East African region Kenya, Uganda and Tanzania, it has been agreed that cigarettes should be banded into three bands by their characteristics. Mr. Temporary Deputy Speaker, Sir, in Kenya we had a situation where our cigarettes were actually categorised into four groups in terms of pricing. Because of the undercutting in the market, we ended up with the four categories and have been moving progressively towards bridging the gap so that we can move to the status agreed upon by the East African countries, where we now group our cigarettes into three categories depending on their characteristics. This amendment, by raising the tax from the lower limit to the upper one, seeks to bridge the gap between Category C and Categories A and B by raising them to a level where they are in harmony with the rest of the region. The proposal by the hon. Member has an effect contrary to what he has told the House. The cigarettes in this category are not manufactured by one manufacturer. All those companies manufacturing cigarettes within that price range, be it BAT, Mastermind Tobacco Limited and so on, are affected by this. Mr. Temporary Deputy Chairman, sir, it is important for this House to note that as we amend this tariff we are bound to lose. In addition to the revenue we are going to lose from our tobacco farmers, we are bound to lose Kshs244 million which has been factored in this year's Budget to be raised from increase in price of cigarettes within that category. I wish to mention that this House, in approving that amendment, we might think that we are saving one industry which has complained to the Departmental Committee, but the effect of that is 3598 PARLIAMENTARY DEBATES November 9, 2006 that we shall lose all the revenue that BAT, Mastermind Tobacco Limited and others were going to pay on all the cigarettes in that category which is now estimated at, based on the current collections, Kshs244 million. I want hon. Members to note the magnitude of the decision they are about to make. The gains are not quite clear because the competition is not because of the tax. I explained to the Committee and we agreed in principle that this amendment should not be proposed. I was surprised to see it appearing on the Order Paper in the last minute."
}