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{
    "id": 955006,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/955006/?format=api",
    "text_counter": 190,
    "type": "speech",
    "speaker_name": "Kipkelion East, JP",
    "speaker_title": "Hon. Joseph Limo",
    "speaker": {
        "id": 1915,
        "legal_name": "Joseph Kirui Limo",
        "slug": "joseph-kirui-limo"
    },
    "content": "The objective of the sin tax is to discourage Kenyans from venturing into betting. There was a view that this tax is not enough. Therefore, at a later stage, we will propose to move it to a higher rate of 20 per cent. It is proposed that the Excise Duty on cigarettes and alcohol will be charged at 15 per cent. To encourage local manufacture of motor vehicles, this Bill is proposing an additional tax of five per cent on small and high capacity vehicles. This Bill is proposing a reduction of Withholding Tax. In the last Finance Bill, I explained to the Members what Withholding Tax is all about. Currently, the business community is required to charge a standard rate of 16 per cent, but when paying the supplier instead of paying in full including the 16 per cent, the law requires them to deduct 6 per cent and remit it directly to the taxman. Then the supplier forwards the remaining 10 per cent tax. The objective of this is to capture more taxpayers. For example, if you supply goods, you are not registered and you have not been paying taxes to a tax compliant person, they will remit the 6 per cent they deduct from you directly to KRA. The KRA then picks your details as being in the supplying business. They wait for you to remit the 10 per cent and if you fail to do so, they come for you saying they received 6 per cent and you can give them the 10 per cent. The intention was to capture more tax payers by getting Withholding Tax from compliant taxpayers. This attempt affected the cash flow of the business community. If you withhold 6 per cent, obviously, it will delay the cash flow. The difference between what you withhold and what you pay should be refunded, but it takes time. This Bill is proposing to reduce the Withholding Tax from 6 per cent to 2 per cent, so that the cash flow issue is minimised. On import declaration fee, whenever you import any item, there is a fee charged on every invoice you raise, namely, the 2 per cent levy. This Bill is proposing to move this upwards to 3.5 per cent with the exception of some players who are participating in the Big Four Agenda especially housing and manufacturing according to Clause 34. Clause 35 is proposing to move the Railway Development Levy, which is currently charged for every import at 1.5 per cent to 2 per cent except the players taking part in the Big Four Agenda. The Bill under Clause 37 is proposing to levy hides and skins at 10 per cent on exports of hides and skins which are popularly known as wet-blue and crust. The intention of this was to discourage exports of these products from Kenya, so that they are used in Kenya. However, unfortunately, when the stakeholders appeared before us, they informed the Committee that 95 per cent of what is currently produced in Kenya is for export. Kenya does not have capacity to use these hides. We use only 5 per cent. To cure that, there is need to promote training of our youth to engage in making of bags and shoes locally. The Technical Training Institutes (TTIs) are currently doing that. So, it is a matter of time before this is implemented. Once we have those youths coming up, they are supposed to help manufacture the items locally. There is an interesting view by some of the Members here that we should also look for a way of promoting the youths who are trained in the TTIs, so that they are given a start-up pack. 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."
}