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{
    "id": 579148,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/579148/?format=api",
    "text_counter": 229,
    "type": "speech",
    "speaker_name": "Hon. S. S. Ahmed",
    "speaker_title": "",
    "speaker": {
        "id": 140,
        "legal_name": "Ahmed Shakeel Shabbir Ahmed",
        "slug": "shakeel-shabbir"
    },
    "content": "The other issue is proposing VAT on industrial and recreation parks. I agree with one of my colleagues who contributed and said that there is no way we can tie it to Section 5. A tax holiday will be better so that they finish the project and continue. Another matter I want to contribute to relates to Rental Income Tax. Some of us have residential properties which we have rented out. Those of us who want to pay tax diligently do our reports, write all our receipts and try and get expenses against the rental income. What happens is that the taxman starts becoming difficult hence give opportunities for rent seeking. The option that has been given is very good. Those of us who wish to pay tax should pay a certain percentage. It is not yet detailed but it should be between 3 and 10 per cent. I would be very keen to pay 10 per cent of the gross rent that I have. This is because at any time you declare your rental property, your expenses will not exceed the rental income that you have except more than 60 per cent of the expenses. So you will be paying 30 or 40 per cent and that roughly works out at about 10 per cent or less. It is an option the KRA is giving. It is a very good option which will bring in more people who want to pay tax without trying to get involved in the bureaucracy. One thing I do not agree with and which I am not sure of is under Section 11, which talks about Capital Gains Tax for shares. Although my Committee Chairman confirms and says it is 0.3 per cent, I am not sure and I beg that we check it out. That does not make sense. It makes no sense whatsoever. Even if it is 0.3 per cent of the turnover, it does not make sense. We want to simplify Capital Gains Tax on shares. It is also a way to get the tax. I think 0.3 per cent is a mistake. If it is not then we better give it exemption rather than the 0.3 per cent. This is because 0.3 per cent of Kshs10 million is Kshs30,000. Nobody who has a common sense will ever want to do that. The issue of the employers and the graduates is a very good idea and we are very pleased that that will work. The issue of transfer and the increase from Kshs30,000 to Kshs3 million is a good idea. The Kshs3 million is the cost of maybe 10 acres of land. In any part of Kenya, the price of agricultural land is not less than that. It is a good idea that there should be no transfer tax paid on that because much of that is being transferred between families. One thing I am very concerned about is that of the vehicle of a returning resident. It has been said even by the Committee Vice-Chairman that it is not going to be the vehicle with a similar year of manufacture. This can be misused. If you are using a 15-year old vehicle in the United States of America (USA) and you want to go and buy a new vehicle or one which is one year old, it will be possible for you to bring it here. This can be misused a lot. I heard someone somewhere say that there are more Nigerians with Kenyans passports in the USA than Kenyans. This is because some of these passports have been misused. So, some people might take advantage and our country is going to be flooded with these goods. The issue of not levying the transfer tax on real estate can also be misused. However, if it remains within those people who were the initial investors in those particular capital investment trusts, that is absolutely okay. I am very much for the Insurance Act and I agree that these things must be regulated by the regulator. In a city like Kisumu, we nearly have 40 banks and some of them are very small. The Banking Act has allowed micro-finance institutions to operate. So, you can do your micro- financing, all banking procedures and be a small bank. There must be some sort of regulations in the mainstream banks. This is happening all over the world. We would rather have a higher capital requirement so that we do not have the Dubai Banks in future. We must get away from this thing. I am a banker and there was a time when 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."
}