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{
    "id": 579033,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/579033/?format=api",
    "text_counter": 114,
    "type": "speech",
    "speaker_name": "Hon. Langat",
    "speaker_title": "",
    "speaker": {
        "id": 384,
        "legal_name": "Benjamin Kipkirui Langat",
        "slug": "benjamin-langat"
    },
    "content": "I also want to inform Members that the rate I am talking about is just a proposal. We may come up with proposals to reduce or increase the rate. For now, it is proposed that there is a tax of 12 per cent for those earning Kshs10 million and below. If you are earning more, the other provision, which is in the Income Tax Act now, will come into play. This means you get your total income, get your expenses and then you are taxed at 30 per cent of the profit. For the small taxpayers, it will be an easier way of administering their taxes. From an administrative point of view, I support this. Clause 10 proposes to amend section 15 of the Income Tax Act in order to extend carrying forward of losses from five years to 10 years. There are companies whose businesses naturally start making profits long after their investment. They report losses for the first year, second year and third year. This proposal says that you can carry forward your losses until you make a profit, say after 10 years, and then claim the losses after the 10 years. It is an improvement to the taxpayer, because you have a longer period to claim your losses from the income that you will get after say 10 or 20 years from now. That is a good incentive to the taxpayers. Clause 11 proposes to remove tax with respect to securities from Capital Gains Tax and subject to withholding tax. Last year, we passed a law in which we introduced the Capital Gains Tax. Subsequently, I believe some of us have been reading the papers, and know that those in the Capital Markets Authority (CMA) and dealing with shares had a problem in implementing the law. In order to address those implementation challenges, there is a proposal to remove the Capital Gains Tax and introduce a withholding tax at a rate of 0.3 per cent of the gross amount payable. Again, it is easier to administer, instead of computing gains as sales minus cost, which has been an issue. There is a big debate even in the real estate on how to compute the gains. These are things we have to be looking at. For example, we have somebody who bought property 20 or 30 years ago. Some of the gains we are talking about are because of inflation and so on. You bought a property at Kshs20 million 20 years ago, and now you are selling it at Kshs300 million. If you are to use the Capital Gains Tax formula, you are supposed to subtract Kshs20 million from Kshs300 million. You will pay dearly. There are proposals to see how we can adjust for inflation, or come up with a better way to ensure you are taxed on the real gain and not for inflation. On shares, the proposal seeks to do away with the Capital Gains Tax and introduce a 0.3 per cent rate on the price. Clause 12 of the Bill intends to exempt film actors and crew members from withholding tax in respect of appearance or performance. We watch Nigerian movies everyday and South American movies almost 60 per cent of the time. There is an attempt to ensure that we improve our local acting and movies in order to improve the local content. This is an effort from the tax perspective. Of course, I know that the Government is doing other things to encourage local actors. There is a proposal for Section 39 of the Income Tax Act to be amended to give tax rebates to all companies which engage 10 or more fresh graduates as apprentices. This is again to encourage companies to recruit our local graduates. They will be given a tax rebate for engaging 10 youths for a period of, at least, six to 12 months. It is proposed that if you engage 10 or more, you will be given a tax rebate. This will encourage local companies to recruit our youths and give them a base to start their careers. This is a very good proposal for our graduates. 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."
}