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{
"id": 246656,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/246656/?format=api",
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"type": "speech",
"speaker_name": "The Minister for Finance",
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"content": "Mr. Speaker, Sir, turning to the infrastructural development and the capital market, there is need to deepen our bonds market so as to mobilise private sector resources to improve our infrastructure. First, in order to encourager private sector participation in the rehabilitation and maintenance of our infrastructure, I propose to exempt from Income Tax income earned by investors who buy listed bonds as asset-backed security for purposes of developing infrastructure. Secondly, on the development of the capital market, hon. Members may recall that in 1995, the Government made the legal cost and other incidental costs related to initial public offer of shares Income Tax deductible. I am proposing to extend this incentive to companies which list on the securities exchange without raising additional capital in order to deepen the growth of the stock market. Thirdly, to help deepen the bond market and provide an avenue to mobilise resources for the development of our infrastructure, I propose to exempt from Income Tax interest income accruing from all listed bonds used to raise funds for infrastructure and social services, provided that the bonds shall have a maturity of at least three years. 1418 PARLIAMENTARY DEBATES June 15, 2006 Fourth, ownership of enterprise, or business, jointly between employers and employees not only improves corporate governance, but also creates incentives for productivity among employees. In order to, therefore, to encourage employers to establish Employee Share Ownership Plans (ESOPs), I propose to introduce legal provisions to determine how the benefits accruing to employees, by exercising the option to own shares, shall be brought to charge. Lastly, our motorists spend a lot of money and time complying with requirements for road licenses under the Traffic Act. We have calculated that on average, a motorist spends about Kshs300 per day, or approximately four litres, on fuel, which excludes the cost of wear and tear arising from the poor conditions of our roads. In a year, this translates to about Kshs100,000, or Kshs1500 litres of fuel. In addition, we all know that the motorist will spend anything between Kshs5,000 and Kshs10,000 depending on the vehicle on road licenses, which is annual, and more on compliance cost, including waiting and queuing at the Kenya Revenue Authority (KRA) offices, and all other costs associated with enforcement. To reduce the compliance cost incurred by motorists under the Traffic Act, I propose to remove, with immediate effect, requirements for road licences on our vehicles. Mr. Speaker, Sir, as you have quickly calculated, based on the consumption of an average of 1,500 litres and a licence costing about Kshs5,000, I intend to recover this amount by charging it to be collected under the Road Maintenance Levy at Kshs3.20 per litre with effect from midnight tonight."
}