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{
"id": 245471,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/245471/?format=api",
"text_counter": 143,
"type": "speech",
"speaker_name": "Mr. Shitanda",
"speaker_title": "The Minister for Housing",
"speaker": {
"id": 207,
"legal_name": "Peter Soita Shitanda",
"slug": "soita-shitanda"
},
"content": " Thank you, Mr. Deputy Speaker, Sir, for giving me this opportunity to join my colleagues in congratulating the Minister for Finance for a Budget which has been roundly praised as being poor-friendly. I have a few issues I would like to comment on, which came out in the Budget. First, I would like to talk about the shift in taxation in the sugar industry, the Sugar Development Levy, which has been shifted from the consumers to the growers. I believe that the shift of that particular levy to farmers will only increase the burden on the sugar- cane farmers besides other taxes that they are subjected to. The Sugar Development Levy, as much as it is being shifted to farmers, may not benefit farmers just as other taxes which are applied in the sector. Mr. Deputy Speaker, Sir, the Kenya Sugar Board has been collecting a lot of money, ostensibly, for the development of the sugar industry. However, if you assess what has been done on the ground, you will see that billions of shillings which have been collected have not benefitted farmers in any way. The Sugar Development Levy has been put under the disposal of millers. Millers have been benefitting from the levy. However, shifting the tax from consumers directly to farmers will be a big burden because farmers are already paying an accumulated tax of 26 per cent. When we shift 7 per cent to the farmers, they will end up paying a total of 33 per cent in form of tax. Mr. Deputy Speaker, Sir, a farmer whose gross income is Kshs2000 per tonne has to pay cess, Value Added Tax (VAT), transport and now, the Sugar Development Levy. In simple arithmetic, a sugar-cane farmer in Busia District who used to deliver his cane to Mumias Sugar Factory before the introduction of the Sugar Development Levy ended up with Kshs400 per tonne. With an additional 7 per cent deduction from his income, I do not see the sugar industry surviving. When you look at the total sum of taxation vis-a-vis what the farmer takes home, there no incentive for anybody to go into sugar-cane farming. That industry has gone through a lot problems in the past. For a very long time now, sugar-cane farmers have always been asking for a reduction in taxation. But to their dismay, instead of the taxation going down, it has been increased. The Minister for Finance should have looked at other ways of raising the revenue required to run this country. Mr. Deputy Speaker, Sir, sugar-cane millers announce huge profits every year. Last year, the profit of Mumias Sugar Factory stood at Kshs2 billion. Those are the funds the Minister for Finance should have targeted. He should have looked at the possibility of taxing companies that are making abnormal profits, instead of going for the poor farmers. Mr. Deputy Speaker, Sir, let me say something about the Bursary Fund. While it is a good June 28, 2006 PARLIAMENTARY DEBATES 1663 idea to put the Bursary Fund together with the Constituency Development Fund (CDF), I am foreseeing a lot of problems. First of all, the rules governing the disbursement of bursary funds are different from those that are used in the CDF. Bursary funds have been allocated by the Ministry of Education on the basis of the number of students in each constituency. So, if we say that bursary funds will be disbursed through the CDF without taking into account the number of students in each constituency, some constituencies are going to be disadvantaged. That is because the formula used in the allocation of funds from the CDF is different from Bursary Fund. The Minister should look into that before he passes on that load from the Ministry of Education to the already over- burdened CDF. Mr. Deputy Speaker, Sir, still on CDF, we have issues of roads. It is good that funds meant for roads are being transferred from the districts to the constituencies. While we welcome that, we would like to appeal to the Ministry of Roads and Public Works to assist constituencies by employing more roads engineers. Even though they will be based at the district level, their main work will be in the constituencies. Transferring those funds from the District Roads Committees (DRCs) to Constituency Roads Committees without availing staff to deal with technical issues will create a lot of problems in the constituencies. Mr. Deputy Speaker, Sir, we welcome the introduction of a Youth Fund. It is a very noble idea. But my only hope is that the Fund will not be administered through the infamous Provincial Administration. It is my hope that the Ministry of Youth Affairs will come up with modalities of disbursing those funds to the constituencies or districts. Mr. Deputy Speaker, Sir, let me talk about the housing sector. Very little was mentioned about that sector in the Budget. But since budgeting is an ongoing process, I hope the Minister for Finance will address some of the issues affecting that sector. We have problems of home ownership especially in urban areas. We had hoped that the Minister would address the plight of first home owners, home developers and estates developers through tax incentives. That would encourage most low and middle-income earners to own houses. Mr. Deputy Speaker, Sir, we have heard a lot about insecurity. A substantial amount of money has been allocated for security issues in this country. I urge the relevant organs of Government concerned with security to devise some home-grown solutions to security situations in some areas. Mr. Deputy Speaker, Sir, we need to address the rate of turnover in the police force. So many police officers are being sent home every week on disciplinary grounds. With those few remarks, I beg to support."
}