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{
    "id": 556235,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/556235/?format=api",
    "text_counter": 283,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "In order to incentivize the shipping sector, I hereby propose to reduce the ships qualifying for investment deduction from 495 tonnes to 125 tonnes and to increase the rate of investment deduction from 40 to 100 per cent. Investors are allowed to carry forward losses without Treasury’s approval up to the fifth year. I propose to extend this period to 10 years considering that there is heavy investment expenditure by some power producers, manufacturers and hotel operators. After Customs Law become part of the East African Community Customs Management Act in 2004, and coming up with a stand-alone Excise Bill, it was found necessary to have a Miscellaneous Fee and Charges Bill to cater for levies which were anchored in the Customs and Excise Act, Cap 472 yet to be repealed. For continuity in collection of the Railway Development Levy, Import Declaration Fees (IDF) and Export levies imposed on hides and skins, it is imperative to introduce the Miscellaneous Bill, which will be the legal instrument to empower the Commissioner of Customs to collect the aforesaid levies. On encouraging growth and stability of the financial sector, Vision 2030 targets the creation of an international financial centre able to attract international investments and participants in the financial services arena. In addition, Kenya needs to have strong well capitalized financial institutions which are not only able to participate in financing the large projects envisaged in the Vision, but that are also well capitalized to withstand financial shocks and crisis. In this regard, I am proposing to increase the minimum core capital requirement for banks, mortgage finance companies and insurance companies. For banks, I propose to increase the minimum core capital progressively from the current Kshs1 billion to Kshs5 billion by December 2018. For insurance companies, I propose to increase the minimum capital to Kshs600 million for general insurance and Kshs400 million for long term insurance business by June 2018. Our financial sector regulators have all adopted the risk-based supervision model in line with best international practice. To facilitate compliance with this supervisory model, I propose to remove the requirement for annual licensing of banks and instead empower the Central Bank of Kenya (CBK) to issue non-renewable perpetual licences. The CBK will continue to monitor banks using the risk-based approach and to carry out inspections on periodic basis while retaining the powers to withdraw the licence at any time. This will eliminate the need for repetitive annual application procedures while still safeguarding financial stability. Similarly, for the insurance industry, in addition to increasing the minimum capital requirements, I propose to introduce risk-based capital requirements to be determined by the specific risk profile of the company. The investment provisions in the Insurance Act are rules-based and are not in compliance with international core principles of insurance supervision. I am, therefore, proposing to move to a more principle based investment framework where insurance companies will be required to prepare and submit investment policies and will be subject to broad prescribed investment guidelines. This investment framework will bring the insurance industry in harmony with the framework already pertaining in the retirement benefits and collective investment sectors. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}