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"speaker_name": "Mr. Muturi",
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"content": "November 1, 206 PARLIAMENTARY DEBATES 3341 Mr. Temporary Deputy Speaker, Sir, having looked at the Bill, I would like to take issue with some of the proposals in the Value Added Tax (VAT). Unfortunately, as I said earlier on, this is not like a Statute Law Miscellaneous (Amendment) Bill which quotes the relevant clauses of each law that ought to be amended and then explains the reasons thereof. Clause 6 of the Bill says:- \"Section 12 of the Value Added Tax Act is amended in subsection (1) by inserting the words \"or such longer period as the Commissioner may, in any particular case allow\" immediately after the words \"within thirty days.\" We want not just to come and pass Bills here. What is it that the Minister proposes to do here? We also do not expect the Minister to actually explain each clause. That kind of statement is enough. We will pass it as it is. This is because we have not had the benefit of being told what it is that the Minister is trying to do. What evil or mischief has he seen in the current law that he seeks to rectify or correct by inserting new phrases? Mr. Temporary Deputy Speaker, Sir, something comes to mind. Within the VAT Department, we have had complaints that claims take forever to be paid out. Now that we have seen the Minister suggesting that if you delay beyond certain periods with money that is due to either the Commissioner of Income Tax or the Commissioner of VAT, he can impose some penalty. Is it not high time, in a reciprocal manner, that the Government also considered paying levies, interests or penalties to business people whose money it stays with for certain periods of time? If this is done, this will put pressure on the officers administering that kind of scheme. We all embrace the fact that there should be greater public-private partnership if we want this economy to grow. If we are to encourage the private sector, it is high time that we tasked, just like we did when we passed a Motion moved by Mr. Musila about the payment of retirement benefits. I doubt if it is being implemented. If it is being implemented, it must be implemented in lack of observance. We said that, if by the time you retire your pension has not been calculated and paid to you, then the Government should retain you at the salary that you were last earning prior to the date that you were due to retire. However, sitting in this House for the period that I have sat, you know a week will not pass by without finding that there is a Question that touches on the Pensions Department. Therefore, it is in that spirit that I am proposing that where the Government delays in making refunds, it should consider paying the business people certain levies either at market rates or at prevailing bank rates. Some of those business people have borrowed money from the banks. They pay interest. When they default in making payments they pay penalties. Indeed, in a reciprocal manner. I think it is only fair that the Government also considers putting such a provision, so that the people at the VAT Department who administer that programme are put on pressure. Mr. Temporary Deputy Speaker, Sir, let me now move on to Page 973 of the Finance Bill. I welcome the proposal by the Minister in Clause 23 where he makes some proviso which, in my view, is very good because it encourages savings and makes the savings of the not too rich exempt from certain forms of taxation. This should be welcomed although I do not want the rationale that, perhaps this is because of the Income Tax Act provisions that this provision should come into force from 1st January, 2007. Mr. Temporary Deputy Speaker, Sir, I want to raise an issue on Clause 37, which says:- \"Section 5 of the Constitutional Offices (Remuneration) Act is amended by inserting the expression \"(other than house allowance and entertainment allowance)\" immediately after the words \"allowances\". I wonder whether the intention here is what the Minister said in the Budget Speech, to allow for taxation of other allowances other than salaries of constitutional office holders. If so, may we know how many of these allowances are there. Why target only these two allowances for exemption? Is it possible that there could be other allowances that, perhaps could also attract some 3342 PARLIAMENTARY DEBATES November 1, 2006 form of taxation? That is for the Minister to consider when we move to Committee Stage. The Finance Bill should, as detailed in the Memorandum of Objects, aim to raise taxes. Mr. Temporary Deputy Speaker, Sir, in this country, we can raise a lot of tax. We have a terrible mentality such that anybody who leaves university, especially those from the rural areas, wants to buy some land. They finish university, earn salary for a few months and the next thing they want to do is to look for loans to buy land. People do not buy land to develop, but we have been socialised in such a way that to walk around the countryside showing hectares and hectares of fallow land is prestigious. So, we have people in this country who own tracts of land that are lying idle. Why have we not considered levying serious taxation on such parcels of land to encourage the owners to productively use them or give them back to the Government? We should have clauses in law providing that if these people do not pay taxes within a given number of years, the land may be taken away by the State without necessarily having to be compulsory acquired. We want to develop this country, but we will not develop it when we have this obsession with land for its own sake. We want to own land, so that we can show people in the village how wealthy we are, when, indeed, we are tying up capital. What has the Government done to educate Kenyans to move away from this crazy of buying idle land. I own a few parcels of idle land, but I do not mind being taxed. If I do not pay tax, the parcels can be taken away from me. Why should I tie it up? I have actually pondered over this issue over a long period of time. Mr. Temporary Deputy Speaker, Sir, the other day, we came up with some very nice proposals about how we would like to see this country move forward in development. Why can we not have deliberate tax reliefs for people who invest in stocks? That is an area which we have not taken a lot of our people into. We must educate our people that land is not the only investment that there is, so that when they finish college, they do not start rushing around looking for land to buy. They should be told that if they invest in stocks, they will get better returns. In a counter manner, we should make it very expensive and unattractive to invest in land. I am talking about the issue of land in relation to taxation because we need free land for those who are able to productively utilise it. We can only do this by coming up with ingenious measures, some of which could come through taxation. I believe that land rates and rents are so minimal and they do not discourage anybody. Indeed, even some of the measures that are proposed in this Bill only target those who are selling houses in towns. We should also target those who have tracts of land in the provinces, districts and locations. They are not using those resources gainfully. To the extent that taxation measures could be a disincentive to the majority of us in that regard, this would, in my view, be welcome. Mr. Temporary Deputy Speaker, Sir, as I conclude, I am working from the position of not having the benefit of seeing any research work on this Bill. However, I would like to look at the proposal in Clause 60. I am aware that the Minister, when moving the Bill, said that he was going to move an amendment to delete the proposal to take the Sugar Development Levy from the farmers back to the consumers. Whereas I welcome that move, I would like to question some issues. About three months ago, I read before this House a report on sugar imports. In Clause 60, the Minister says that he is amending the Sugar Act, by deleting Sub-section 1 and substituting therefor the following new sub-section 1:- \"The Minister may, in consultation with the Board, by order in the Gazette, impose a levy on sugar-cane to be known as the Sugar-cane Development Levy\". Mr. Temporary Deputy Speaker, Sir, my quarrel is not about the levy being taken to the farmer. Having laid a report here on sugar importation, why are we still obsessed with the issue of the Minister being able to consult with the Board? It was said here that if the Minister responsible calls the Chairman of the Sugar Board to his office for a cup of tea or discusses some issues with him on phone, that is considered to be sufficient consultation. That is what the Minister for November 1, 206 PARLIAMENTARY DEBATES 3343 Agriculture said here, notwithstanding the very clear provision of Section 5 of the Sugar Act, 2001, that defines what the quorum of the Board is. The Minister for Agriculture stood in this very House and said that when he calls the Chief Executive for a cup of tea in his Kilimo House office and they discuss some issues, that is consultation. We have a very clear provision and then the Minister, in implementing it, says that when he calls the Chief Executive of the Board for a cup of tea in his office, he considers that to be sufficient consultation. Are we not making a mockery of what we are doing? Why should we pass laws that we do not intend to observe? In that particular case, the Minister engineered the sacking of the Chairman of the Board. He went on to order that fresh elections be carried out, so that a new and more compliant Board could be put in place. We come here and pass very elaborate laws with clear provisions that the Minister would have no doubt in his mind, but they are ignored. So, I hope that when you put these kind of provisions in law--- because I can see even the next section has a problem. I happen to have taken some little time to study the Sugar Act for some time, so I know where the problem is. It is only that I will not be around during the Committee Stage, but I would actually have moved an amendment; perhaps I should do that even before I leave, that would make it mandatory for the Minister to consult the Board and such boards, but not an officer, the chairman or a member of the Board and then say that, that amounts to consultation. Mr. Temporary Deputy Speaker, Sir, there is something very worrying in the next clause; Clause 61, because it says:- \"Section 27 of the Sugar Act, 2001, is amended in Sub-section 1 by deleting the words (and such imports shall be controlled by the Board)\". That is being removed. When we debated the Sugar Act in this very House in 2001, hon. Members from the sugar cane growing areas were very clear why they wanted the Board to be the one to control any imports coming into the country. It was for a very good reason, because we have given the Board certain serious functions, which include, among others, considering how much is to be imported into the country and at what time, because it is the Board which must, at all times, protect the interests of the farmers. Indeed, that Board is comprised of very many people and stakeholders in the sugar industry. A lot of the directors are elected from within certain specified zones. It is for that reason that hon. Members from sugar cane growing areas were very clear and said that, if the country was ever to import sugar from outside, then those imports must be controlled by the Board because it is the one that sugar cane farmers have entrusted their welfare to. In this Finance Bill, that power of control is being removed or is proposed to be deleted. The amendment says:- \"By deleting the words (and such imports shall be controlled by the Board)\". So, those words: \"Shall be controlled by the Board\" are the ones being deleted."
}