Entry Instance

HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept

{
    "id": 577827,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/577827/?format=api",
    "text_counter": 277,
    "type": "speech",
    "speaker_name": "Hon. (Eng.) Gumbo",
    "speaker_title": "",
    "speaker": {
        "id": 24,
        "legal_name": "Nicholas Gumbo",
        "slug": "nicholas-gumbo"
    },
    "content": "The major sources of excise tax in our country still remain alcohol. In fact, every year when we read the Budget, we talk about “sin taxes.” That being so, the method of determination of excisable value must not be, in my view, a whimsical exercise or an algorithmic process such as the one outlined in Clause 9 of this Bill. If you look at Clause 9 of this Bill, which talks about the excisable value, what would form the Excise Duty, you will understand why over the years we have had a lot of disputes over this tax. As we speak, there are major industrial establishments in this country which are almost grinding to a halt arising from the determination of what is the excisable value or indeed what is the Excise Duty payable. I do not take alcohol or smoke. I do not even own shares in companies that sell alcohol and tobacco because of my beliefs. However, the truth of the matter is that manufacturers of alcohol and tobacco still remain some of the largest taxpayers in our country. That is a reality that needs not to be over-emphasised. When we deal with them, we must understand that to that extent they remain more or less the goose that lays the golden egg. I have spoken before of the need to help home-grown companies grow. Look at a company like Keroche Industries which manufactures alcohol. It beats logic that a company which only recently hosted none other than the Cabinet Secretary (CS) for Industrialisation and Enterprise Development to launch a product could have been lumped together with companies that are making illegal alcohol. It does not make sense to me. Most importantly, the misunderstanding that is currently going on between Keroche Industries and the Kenya Revenue Authority (KRA) is not healthy. We are sending wrong signals to Kenyans who own companies. Mrs. Tabitha Karanja remains one of those Kenyans who need to be congratulated because through Keroche she has taken on some of the multinationals. It is not an easy thing to take head on companies like Diageo and Guinness. Yet it appears that through wrong application of taxation, particularly Excise Duty, this major Kenyan enterprise is almost going on its knees. When taxation of any kind appears to be punitive, then it does not make sense. Tax must ultimately help the people of Kenya. A tax regime which appears to particularly target home- grown companies in a way that does not help them to grow is wrong. Therefore, Clause 9 needs to be made simple so that the determination of excise value of goods and services is a simple process. These long algorithms that go into the method of determining the excisable value are not helpful. More often than not, part of the reason that people tend to evade taxation is when the tax is punitive or in cases where people are overtaxed, the procedure for getting refunds is not simple enough. Clause 28 of this Bill talks about the procedure for refunds. The procedure provided here is too laborious. When people are faced with a situation where they feel they need to be refunded taxes that have either been taken in excess of what ought to be paid or taxes that ought not to have been paid in the first place, they go through a long process. It makes the procedure for determining excisable value whimsical and too lengthy. It reduces it to a subjective process where the tax authorities more or less are the ones to decide what they want. Sometimes it does not give the taxpayer an opportunity to also be part of that determination. The procedure for refunds outlined in Clause 28 is too long. I will be very keen to see what the Committee report says about Clauses 9 and 28 on excisable value and on the procedure for refunds. If this Bill is passed, in my view the Excise Duty Act will create the Commissioner for Excise Duty. This Bill largely bestows the administration of tax on the Commissioner-General. While it is good to consolidate administration, we need to be clear. We need to create the office 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."
}