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{
    "id": 579118,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/579118/?format=api",
    "text_counter": 199,
    "type": "speech",
    "speaker_name": "Hon. Ng’ongo",
    "speaker_title": "",
    "speaker": {
        "id": 110,
        "legal_name": "John Mbadi Ng'ong'o",
        "slug": "john-mbadi"
    },
    "content": "the reason we had to repeal the entire Value Added Tax (VAT) Act in 2013, if I am not wrong, was because we had had very many piecemeal amendments to this VAT law which made the law inefficient, ineffective and nonoperational. Therefore, I think the Government and the Treasury should avoid amending the VAT Act through the Finance Bill. If there is need for amendments to the VAT Act, we need to bring comprehensive amendments which are well thought out and not done by impulse. I am for the idea of charging 6 per cent as withholding VAT. I support that because it is going to help this country track some of the business people, companies and those business enterprises that have been evading tax. At least, we will have a system where their information is captured by the Government. If we can make all or most of the entities that are viable to be tax collection agents then the better for us. I am sure we are going to net some of these people who have been evading tax. We need to broaden the tax base. We need to bring as many people as possible to taxation so that a few Kenyans who are loyal and faithful to this country and want to pay tax do not suffer at the expense of those who have the capacity and are not ready to pay tax. The problem with this country is that a few Kenyans are overtaxed while very many avoid paying tax and become very rich to the extent that they start using their riches even to show off to those who have been paying their taxes faithfully. Hon. Deputy Speaker, with regard to Capital Gains Tax, I think I am one of its proponents. Actually, I am the one who first brought an amendment to this House in 2013 to have the Capital Gains Tax reintroduced. It became a little bit political and we took party line at that time but, I am happy that the Government lost my idea last year and reintroduced the Capital Gains Tax. It does not matter the source of this idea as long as the right thing is done. I have no issues with that. Now that we have the Capital Gains Tax with us, there are challenges that we cannot run away from. One of the challenges is: how are you going to calculate the gain? That has been a thorn in the flesh and it is subject to abuse. One of the principles of taxation is to make tax systems easy to understand so that it is not exploited by even the same people who are given the responsibility to collect tax. So, calculating the cost and determining the gain has been a challenge. Therefore, I would not object to the introduction of 0.3 per cent of final tax on the price of an asset that is exchanging hands but, I have a problem with the percentage. I was trying to calculate what is 0.3 per cent of Kshs1 million and it is just Kshs3,000. A 0.3 per cent of Kshs100 million comes to only Kshs300, 000. If I sell a house for Kshs100 million, I will make a profit of something close to Kshs20 million or Kshs30 million. If I am only going to pay Kshs240,000 to the Government and yet some people who do business and make a profit of Kshs20,000 are required to pay tax at 30 per cent, it is not fair. We need to review these tax rates. When I talk about some of these things, people say that I am not a capitalist. Capitalism that hurts other people just because you have the ability is not good. In my view, I would remain a socialist than be a capitalist in that sense of capitalism. It is wrong to tax land or any proceeds that one gets as a result of a forceful acquisition of land by the Government. I want to conclude, because I can see my time is up, by talking about the Kshs3 increase on the Fuel Levy Fund. Much as I know we need roads, until the Government properly accounts for the money that they are already raising in terms of fuel levy, there is no need to burden Kenyans more by taxing them more. Actually, the Ministry of Transport and Infrastructure has 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."
}