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"id": 81267,
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"speaker_name": "Mr. Okemo",
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"legal_name": "Chrysanthus Barnabas Okemo",
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"content": "Mr. Temporary Deputy Speaker, Sir, I am going to comment very briefly because we have held very extensive consultations and discussions with the Minister, and many issues which were in contention have been ironed out. I would like to just observe that in the Budget Speech, the Deputy Prime Minister and Minister for Finance indicated that the revenue collected by the Kenya Revenue Authority (KRA) was projected to go up by almost 17 per cent in 2010/2011 as compared to 2009/2010. My only worry with that is that if you look at the historical performance, I think KRA has done a pretty good job. But I have a feeling that, sometimes, they give themselves very stretchy objectives. The problem with that is, if they do not achieve the objectives they have set, then this creates a distortion in the financing of the Budget. This means that all the items that have been budgeted for cannot be implemented, because the revenue that is projected is not realized. Mr. Temporary Deputy Speaker, Sir, it is gratifying to note that the economy has picked up. If you compare the state of the economy during the last financial year with this year, I think there is a lot of optimism. According to the available projections--- I think when the Minister was in Washington DC the other day, I did get it from the media that the IMF have made a projection of the growth of the economy of between 5 per cent and 5.5 per cent. I think that is very encouraging. If we keep up with the programmes and the policies that the Government has put in place, I think it is an objective that we can realize. There are few things that are contained within the Finance Bill, which I just want to comment on very briefly; one is the amnesty to the diaspora. After discussions with the Minister, we came to agree that what he has got in the Finance Bill is acceptable. I think once we have had it, for the future, it will be very dangerous to provide an amnesty, because it works as a disincentive to the tax abiding citizens of Kenya. Once you give an amnesty to those who do not pay, the implication is that those who pay are actually being penalized and those who do not pay are actually being rewarded. So, it is a good thing as a one-time measure and we agree with the Ministerâs proposals. But it is not something to be encouraged, because it works as a disincentive to those who are compliant tax payers. Mr. Temporary Deputy Speaker, Sir, we discussed at length with the Minister the question of VAT refunds; I think Mr. Obure correctly alluded to this. It is an issue that has been a problem to the business sector, because a lot of time is taken before the VAT that has been collected is refunded to the business community. Since that is their money which they can use as capital to do business; once it is denied for a prolonged period of time, then they are forced to go to banks to borrow to cover up that gap and that leads to an increase in the cost of doing business. I would, therefore, like to emphasize that even though we received a lot of assurances from the Minister that a lot of discussions are underway, and that it is a subject they will pursue and ensure that the period of delay is cut down to, preferably, a maximum of 60 days, it is something we want to watch carefully between now and the next Finance Bill to ensure that--- If it can be done administratively, then it will not be necessary to enact a law to demand that the KRA should refund VAT after a specified period of time. I want to end by saying that the amendments that will come at the Committee Stage are amendments we have discussed at great length with the Minister. I just want to add that the Government, as a policy matter, should make sure that when they increase, vary or change a tax law, it is not punitive to any sector of the economy; where there is competition one competitor should not appear to be disadvantaged. I think the Government appreciates that. We have discussed that and have agreed with the Minister that we are going to look into it. This is because in the past, there have been a lot of complaints. Keroche is a good case in point, which is something we have discussed on the Floor of this House, where they feel that a particular tax measure targets them disadvantageously. We hope that we will minimize those kinds of situations and have a tax that is neutral in terms of any taxpayer; that no taxpayer appears to be disadvantaged."
}