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"id": 237853,
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"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 Speaker, Sir, I beg to move that the Finance Bill be now read a Second Time. Mr. Temporary Deputy Speaker, Sir, may I start by expressing my sincere gratitude to hon. Members of this august House for the support that they have given to the taxation proposals that I announced during this year's Budget. As I indicated, our economy is now enjoying a broad-based expansion that we have not witnessed in decades. The real Gross Domestic Product (GDP) increased to 5.8 per cent in 2005 from 4.9 per cent in 2004. However, in order to address the twin challenges of poverty and unemployment, our economy must expand by at least 7 per cent on a sustainable basis, coupled with strategic Government intervention to ensure that more benefits are reaped by the poor of this country. The taxation measures that I proposed during this year's Budget are intended to remove administrative and legal barriers in order to create an enabling environment for private sector growth. I am happy that part of those measures have just been passed by this House. They are also intended to address inequality while creating opportunities for the youth to actively participate in economic development. This will ultimately result in poverty reduction, especially in the rural areas. Mr. Temporary Deputy Speaker, Sir, as hon. Members are aware, the East African October 26, 2006 PARLIAMENTARY DEBATES 3229 Community Customs Union Protocol has been in operation for almost two years now. In this regard, in consultation with the Ministers for Finance for Uganda and Tanzania, we did undertake to implement measures aimed at improving the welfare of our people. That is by reducing the cost of production and offering some protection to our infant industries. Along these lines, we removed import duties on solar equipment and accessories, filter paper and wire of stainless nickel bars, rods and profiles. I would like to report to this House that, as a result of some of these measures, our industrialists are enjoying better competitiveness vis-a-vis the rest of the world just after three months. Also to protect our local producers of mats and matches, we increased import duty on these items from 10 per cent to 25 per cent and from 35 per cent to 50 per cent, respectively. Once again, I would like to report that we have had tremendous progress due to this protection and our industries might as well be on the road to recovery. The Finance Bill of 2006 contains various proposals that relate to the VAT, Excise Duty, Income Tax and miscellaneous fees and taxes. I wish to highlight just a few of them since the hon. Members will have ample time to scrutinise the proposals that are contained in the Bill. I also wish to draw the attention of this House to the fact that since the publication of the Finance and its laying the Bill on the Table of this House, we have received several representations from various stakeholders, Members of Parliament and Committees of Parliament. We have also been very sensitive to the wishes of the Kenyan people. I will also be bringing here a number of amendments to some of the proposals that we have made. Some of them will relate to the Sugar Development Levy and the Insurance Act. I will table all these amendments, so that we discuss them and make the necessary amendments to the Bill at the Committee Stage. Mr. Temporary Deputy Speaker, Sir, our youth are dominantly in the areas of music, drama and other entertainment services. In order to promote the growth of music and the theatre industry, I proposed to exempt VAT on entertainment services provided by local Kenyan artists. This measure is expected to make these services cheaper, hence encourage more youths to participate in them. I am happy to report that since the 15th of June, we have had more performances. Our Kenyan youths are promoting their products and feeling far much happier than before now that their services are more competitive. As they entertain people, they are able to sell their products more easily. Most of our people live in rural areas and agriculture is their main activity. In recognition of the great role played by the agricultural sector in creating employment opportunities to our rural folk, I propose to zero-rate agricultural tractor tyres, agricultural tractors and semi-trailers for agricultural tractors."
}