HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept
{
"id": 601918,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/601918/?format=api",
"text_counter": 166,
"type": "speech",
"speaker_name": "Hon. Kang’ata",
"speaker_title": "",
"speaker": {
"id": 1826,
"legal_name": "Irungu Kang'ata",
"slug": "irungu-kangata"
},
"content": "powers. You need to issue an order first, freezing that money pending any litigation, or arguments, concerning whether you are liable to pay that money or not. However, there are also other negatives on the other side. If for instance, you freeze an account and there was a cheque that had been issued in favour of that account, it may bounce because of that order of the Kenya Revenue Authority (KRA). Therefore, the powers we are giving to the taxman under Clauses 41, 43 and 44--- Probably, we need to tamper them taking into account the fundamental rights of people and property. I would like to draw the attention of the Chair to Clause 47 of this Bill, which deals with the refund of overpaid tax. We all know how it is hard to get a refund of overpaid tax from KRA. One of the things that we need to consider is a situation where KRA owes you money; it can be credited towards your tax bill for the next year. I do not see a situation where it holds that money, but you still pay again in the next year, when they still have some money which is owing to you. Alternatively, it can be converted into an asset; therefore, you can pedal that asset around. It can be transferable. In other jurisdictions, overpaid tax can be used as an asset from the State. I would like to draw your attention to Clause 85 of this Bill, which establishes a tax avoidance penalty. Though I seek guidance from experts in this field, to the best of my knowledge, tax avoidance ought not to be a crime. That which ought to be a crime is “tax evasion”. Tax avoidance is where you get a person who knows tax laws; he applies his mind to how you can avoid tax legally. I do not understand as to how that can be punishable in law. That which is punishable in law is tax evasion, where you know that you are supposed to pay tax and you deliberately fail to pay that tax. Avoidance is an issue of how you get an expert who is going to advise you on how to avoid tax, and there is nothing wrong with that. I think it is settled in tax matters that avoiding tax is not wrong. That which is wrong is to evade tax. Therefore, I would ask the Departmental Committee on Finance, Planning and Trade, to give me the rationale of Clause 85, which is making tax avoidance illegal. I also draw the attention of the Chair to Clause 108 of this Bill, which talks about tax to be paid despite prosecution. It is providing that assuming you are prosecuted for non-payment of tax, notwithstanding that you are contesting that payment; the interest will still accrue irrespective how long that prosecution is going to take. What if you win the case? What if both parties, you and KRA, win so that it is like a middle kind of judgment? Strict reading of this clause means that you will still pay a penalty. I am of the view that this should be left to the judge or the Tax Tribunal to decide as opposed to making it illegal for one to negotiate with the tax authority. From my jurisprudential point of view, I support payment of tax. I want to celebrate payment of tax, though I urge Members to take into account--- We have another school of thought which holds that at times taxes can stall growth. Jurisdictions which have fewer taxes tend to grow more. Dubai has been given as an example. Though we may be celebrating tax, it may be a hindrance for progress because investors within a capitalistic society tend to go where there are fewer hindrances, whether those hindrances take the form of tax or any other administrative form. With those remarks, I beg to support, save for those few clarifications I sought from the relevant Committee. Thank you."
}