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{
    "id": 954792,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/954792/?format=api",
    "text_counter": 484,
    "type": "speech",
    "speaker_name": "Othaya, JP",
    "speaker_title": "Hon. Gichuki Mugambi",
    "speaker": {
        "id": 13463,
        "legal_name": "James Gichuki Mugambi",
        "slug": "james-gichuki-mugambi-2"
    },
    "content": " Thank you, Hon. Temporary Deputy Speaker. I also want to join the rest of my colleagues in thanking the Committee on Finance and National Planning for a job well done, especially in considering the contentious issues and addressing them beforehand, in particular, the increase in the Capital Gains Tax, which it has retained at 5 per cent. This should be the spirit of committee workings. One issue that they should have considered is the issue of the Presumptive Tax. Presumptive Tax is a very discriminative tax because we all know that taxes are paid on profit. When you presume that small businesses with a turnover of Kshs5 million are making profit and you tax them in advance, that is discrimination. I wish the Committee would borrow the wisdom of the 2018 committee which scrapped that kind of taxation. You cannot presume that somebody is making profit and tax him or her. Let me also allude to the issue of removal of interest rate capping. We have heard several times banks say that they are not able to lend to SMEs because interest rates have been capped. There is nothing that can be farther from the truth as this contention. The SMEs in this country are suffering because of reckless lending by banks. When they were not controlled, they were lending to SMEs at interest rates of 30 per cent. And they were so reckless that they were not even demanding security for lending. Actually, they were shylocking to SMEs. Today, they want to go back to that reckless practice. We have to be very firm on this issue of interest capping. So far, we are seeing a lot of benefits. I would request even the Executive to see the benefits we are getting out of the capping of interest rates, among them the consolidation of the financial institutions. Today, we have seen financial institutions coming together to achieve economies of scale and reduce their costs of operations. If banks want help, we can help them more. If they reconsider the kind of big perks they give to their CEOs, they will save all the money they need in this world. Last year, one bank paid its CEO Kshs750 million in a year. And these are banks that want to make much more money. I think this is the time to stand with Kenyans and request our banks to continue consolidating and to continue addressing their costs of operation. Today, the margin between the cost of funds and the rates at which they lend is still very high. But we need to throw a caution that our Government should not give a blank cheque to 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."
}