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"id": 237441,
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"speaker_name": "Dr. Oburu",
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"legal_name": "Oburu Ngona Odinga",
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"content": "Thank you, Mr. Temporary Deputy Speaker, Sir, for giving me this opportunity. As it was stated by the Minister in his remarks this afternoon, this is the most important Bill that is being debated by Parliament. Taxation measures are one of the reasons why Parliament was created. Parliament was created to interrogate the Budget and particularly taxation measures. The principle of no taxation without representation is very cardinal to our presence here as Members of Parliament. Mr. Temporary Deputy Speaker, Sir, the various measures that have been introduced by the Minister are very positive. I would want to encourage him to continue improving on the taxation measures. Some of the fruits of these measures have been seen in the amount of revenue being collected by the Government now as opposed to previous years. We hope that the measures being introduced will continue to improve tax collection, because that is the money that is needed for the Government to provide services to the people. However, we would like taxation to be fair. It should not be used as an instrument of punishment of certain sectors of the economy against the others. We know that this is possible. Because of this, we would like to scrutinise this very thoroughly. The Departmental Committee on Finance, Planning and Trade, which I chair, has discussed some of the issues with the Minister. We do not want to repeat those ones, because we are going to see them in the amendments in the areas where we have agreed, which will be presented before the House. If there are areas where we are not quite satisfied, we are going to introduce those amendments before the House. Mr. Temporary Deputy Speaker, Sir, one of the issues which we have been debating is in relation to Central Bank (Amendment) Act, which is in Clauses 55 to 56, Cap.491. This is in respect to the introduction of the position of Chairman of the Central Bank of Kenya. Our concern is that unless the roles of the Chairman and the Governor are carefully described and defined, it is going to create the possibility of conflict. Both the Chairman and the Governor are appointees of the President. Unless you draw a clear demarcation of their responsibilities, this is clearly going to create conflict. Our concern was that, in most African countries, because of the importance of the position of the Governor of Central Bank in management of the financial sector, the Governor is also the Chairman. In fact, there is almost no single African country where the Governor is different from the Chairman of the Central Bank. The Minister has tried to convince us that this is good for corporate governance and so on. But we are recommending that there should be a clear definition of the roles to avoid possible conflict of interest. Mr. Temporary Deputy Speaker, Sir, the other area of concern is the Sugar Act. The movement of the sugar development levy from the consumer to the farmer is of great concern, and it is creating turmoil in the sugar industry, particularly in Western Kenya. We are happy that the Minister is considering to remove this and I hope that will be a reality so that we can go back home happy that our people will not be adversely affected. Sugar is a very important commodity in this country. We are quite concerned that when the other crops are being treated fairly, we have felt that sugar has not been given proper treatment. When the other crops like coffee and tea have had loans written off for the farmers, this has not happened in respect of the sugar industry, despite the fact that the President has been to Western Kenya on many occasions and recommended the same. We hope that the Minister will effect this Presidential directive, that the sugar growing farmers should also benefit from the write-off of loans which were acquired but for various reasons, including drought, they were unable to service them. The sugar-cane farmers should be allowed to start on a clean slate just like the coffee and tea farmers. Mr. Temporary Deputy Speaker, Sir, the licensing which was done yesterday has not been concluded. There are a few issues which we want to discuss in relation to that. Mr. Temporary Deputy Speaker, Sir, we are also happy that the Minister has seen it fit to 3246 PARLIAMENTARY DEBATES October 31, 2006 remove or amend some of the concerns which were raised in respect of insurance, particularly in relation to the amount of money to be paid by the brokers which was proposed to be Kshs5 million and this was actually going to affect a lot of brokers. It is going to put a lot of people out of business and we are happy that the Minister is giving consideration to that aspect. Mr. Temporary Deputy Speaker, Sir, we are also very impressed that the Minister is introducing a law which will now allow the Islamic Bank to be introduced. This country has been quite concerned about the interest rates and bank charges. We have been very angry on the Floor of this House that banks are charging exorbitant and illegal charges to customers. It is because of these charges that many Kenyans have gone bankrupt and yet there is no remedy to those who have been made bankrupt by those illegal charges by the banks. The Islamic Bank is going to create some sanity in our financial sector because it is going to introduce a practice where those illegal charges will not be entertained and where charges will stagnate once they exceed the original capital advanced. This is going to be like the In Duplum Rule which is still stuck here in Parliament and not passed. Mr. Temporary Deputy Speaker, Sir, we were concerned, and we are still concerned, about the amendments to the remuneration of constitutional offices. The Constitution of Kenya says that: \"No law shall be introduced which will affect the remuneration of the salaries of the constitutional offices\". We are not sure whether the amendment brought here by the Minister is not going against the Constitution of Kenya because if the effect of taxing the house allowances or other allowances of those constitutional offices will have the effect of reducing their benefits, it is quite possible that this will infringe on the Constitution. I am not a lawyer but we would not want to introduce any amendment in the Finance Bill which might fundamentally even affect the Constitution. Mr. Temporary Deputy Speaker, Sir, we are also concerned that some of the amendments which are brought here are amendments which refer to specific issues like insurance. The Insurance (Amendment) Bill is before this House. Our concern was that perhaps it would have been better to bring some of these issues in the Insurance (Amendment) Bill so that the House could debate them thoroughly rather than sneaking them through the Finance Bill where people might not have a possibility to interrogate and debate them thoroughly. Mr. Temporary Deputy Speaker, Sir, the same applies to constitutional offices. Constitutional offices are very important offices for democracy and protection of human rights. It is unfortunate if we pass any law which might affect their morale and remuneration without having thoroughly debated and scrutinised them. Mr. Temporary Deputy Speaker, Sir, I am happy with the clarification which the Minister has given us in respect of the Kenya Revenue Authority Act (KRA) Act because KRA has improved on their revenue collection methods and they have done a good job. So far, they have increased revenue collection and we would not like to introduce any amendments to the Act which will not give them sufficient resources to continue doing their job. We were informed that the Act now says that they are now supposed to be given by the Treasury 1.5 per cent of the monies they collect for the administration of tax collection. The Minister was proposing to increase it to 2 per cent but we are told that even the 1.5 per cent has not been given, that actually what they get is between 0.6 to 0.8 per cent. The Minister has clarified that and we are concerned about discretion. We do not want to give the Minister too much discretion. Mr. Temporary Deputy Speaker, Sir, we will raise all these issues also at the amendment stage but there are two issues which I want to bring to the attention of this House. This is in relation to fairness in levying tax on local industries. It is very important that we encourage local industries in this country. We are not saying that we do not want multinationals to invest in this country. We are saying that we want investors to come and we should give them incentives to do so. However, while we do that, we are not going to encourage multinational investors at the expense of our own local industries. Mr. Temporary Deputy Speaker, Sir, this is in respect of a schedule in taxation of cigarettes October 31, 2006 PARLIAMENTARY DEBATES 3247 where a local industry has petitioned our Committee saying that the brand of cigarettes which they produce has been targeted for increase in taxation whereas the brand of cigarettes which is produced more by the multinational companies is not targeted for that kind of increase in taxation. This is going to kill the local initiative. We are saying that there should be taxation and the increase of taxation in cigarettes is supported by us. We support that it should be there but we want that increase to be across the board. It should not be discriminatory. It should not isolate certain categories and then leave the others untaxed because we do not know the criteria used in applying this kind of taxation. Year in, year out, this kind of taxation has been done across the board and it has not been discriminatory. We are wondering why there is now discrimination in targeting certain type of cigarettes and not the whole of them. The same applies to wine and spirits which the Minister talked about here on the Floor of the House. We know that there are a lot of illicit drinks being consumed in this country. We know that the people who consume the illicit drinks which are lethal are people who drink chang'aa and if we want to move these people out of that lethal drink, we must introduce a drink which is well prepared and which will satisfy the appetite of those who drink those hard stuffs. Uganda has done well by introducing one drink called waragi . Tanzania has also done well since it has introduced another one. I have forgotten the brand name. Here, we have an industry called Keroche which was producing what they call fortified wine which has an alcohol content of 24 per cent. We went to that industry and found that there are actually no lethal elements in those drinks. We went to the Kenya Bureau of Standards (KEBS) to check whether these people are producing something which is lethal to wananchi . We do not want an industry to be killed through taxation. If an industry is producing lethal products, the Government should close it the same day. There is no reason why industries producing lethal products should be allowed to do so but if they are producing products which are not lethal, taxation should not be used as a means of killing those industries. Here is a case where the prices of products produced by that particular industry which is actually catering for that group consuming that lethal drink called chang'aa are being made prohibitive through taxation. Mr. Temporary Deputy Speaker, Sir, I think these are some of the issues which should be looked at when we are looking at taxation so that it is fair, not punitive and must not be used to encourage the multinationals to continue with their monopoly at the expense of the local industry. With those few remarks, I beg to support."
}