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{
    "id": 808269,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/808269/?format=api",
    "text_counter": 198,
    "type": "other",
    "speaker_name": "",
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    "speaker": null,
    "content": "Thank you, Hon. Temporary Deputy Speaker. I thank you for giving me an opportunity to contribute to the Tax Laws (Amendment) Bill. I also want to reiterate what the Leader of the Majority Party said that the Bill intends to amend three Acts of Parliament, namely, the Income Tax Act Cap 470, the Stamp Duty Act Cap 480 and the VAT Act. There are good provisions in this Bill and I will start with them. I have no problem with the proposed amendments to the Income Tax Act because the Cabinet Secretary intends to tax the proceeds of winnings from gaming. Although, we also need to agree, as a country, the direction we want to take. If we are not comfortable with some of those activities, we need to put a stop to them rather than talking of taxing them. I have no problem because winnings are actually an income. When you earn an income, it just makes sense that it is taxed. The winnings have become so huge that some people become billionaires overnight. It is important that those people are taxed from the income they get. The other proposed amendment under The Income Tax Act Cap 470 is to increase the amount allowable for tax purposes in terms of contributions by employed persons to registered home ownership schemes. This is proposed to increase from Kshs4000 to Kshs8000 per month. That is a good one. It will encourage Kenyans to save more to own homes. It should now be understood that if you contribute up to Kshs8000 every month, after this Bill becomes law, you will have a tax relief to that magnitude. That is something that we need to support. On Stamp Duty, there is a proposal to amend the Stamp Duty Act Cap 480 to remove or exempt those who are buying homes for the first time from paying Stamp Duty. That makes sense because Stamp Duty in this country is 4 per cent. If you are buying a home of Kshs10 million for the first time, you are required to pay Kshs400,000. That will come as a relief for those who are buying homes for the first time. I have a problem with the provisions in the VAT Act and I am happy that the Departmental Committee on Finance and National Planning has already proposed to stop the move by the Ministry from moving items from zero-rating to exempt. Most of the items that were proposed to now be exempted and not zero-rated are basic commodities. They are commodities that Kenyans need to survive. They are very essential items. Some of us who are not finance experts may not understand the difference between zero-rating and exempting items. When you zero-rate items, apart from the output tax which you will not pay or you will pay at zero, which is basically nothing, you are allowed to claim the import tax. For example, if you are selling a piece of furniture and it is zero-rated, apart from the fact that there will be no VAT on that piece of furniture, you will claim the tax that you paid when buying all the items that went into manufacturing the piece of furniture like glue, nails and timber. But if you exempt it from tax, it means that it is only the piece of furniture which will be exempted from tax yet all the items that were used to manufacture the piece of furniture will still attract tax. In summary, the price of a commodity that is zero-rated is cheaper than a commodity that is exempted from tax. The electronic version of the Official Hansard Report is for information purposes only. Acertified version of this Report can be obtained from the Hansard Editor."
}