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{
    "id": 985528,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/985528/?format=api",
    "text_counter": 894,
    "type": "speech",
    "speaker_name": "Kipipiri, JP",
    "speaker_title": "Hon. Amos Kimunya",
    "speaker": {
        "id": 174,
        "legal_name": "Amos Muhinga Kimunya",
        "slug": "amos-kimunya"
    },
    "content": "taxes, which means more disposable income to people at higher levels. The rich will have more money to consume. They will not pay tax because we have also reduced VAT. I want to agree with the Chairman of the Budget and Appropriations Committee, and Hon. Makali Mulu; that, perhaps, this is a very good populist move; but in another two or three months, the National Treasury will realise that they made a mistake on this one – that, it is not the kind of move they expected would benefit the common man. You cannot lower prices of goods through VAT adjustments in an economy where prices are liberalized. The trader has no obligation to reduce prices. In fact, they could raise the prices tomorrow on account of shortages and the poor person will not benefit, but we will have lost Kshs49.5 billion. We are sure that the National Treasury will lose Kshs49.5 billion, but we are not sure whether that money will benefit the poor mwananchi . The National Treasury should look at things from a totality perspective. You cannot lower Income Tax to provide more disposable income to people you should be taxing to raise money to cushion the poor, while at the same time you benefit those same people by lowering VAT. Hon. Speaker, I wish I had an extra second because today we have lowered the price of fuel by a whooping Kshs18 when there is no movement. As we do so, we must remember that the prices of fuel have gone down on global basis because of an impasse within the Organisation of the Petroleum Exporting Countries (OPEC). Member countries of OPEC have since agreed to cut production. So, the prices of fuel will go up again next month. What will happen at the local level? All traders will start hoarding the product. You can be sure that as the sun rises from the East and sets in the West, there will be hoarding and shortage of fuel because those who bought the product yesterday will not be willing to reduce its price by Kshs18 per litre when they expect to make another Kshs20 per litre next month. They will not revise their prices. We need to closely look at some of the decisions from the National Treasury because this kind of yo-yo is not good for the economy. It might be populist but certainly not sustainable. I support the regulation, but I wish the Departmental Committee on Finance and National Planning would revisit the VAT issue when we look at the tax laws. As you reduce VAT from 16 to 14 per cent, you are also loading agricultural products that are exempted from tax to pay the 14 per cent. There is a lot of mismatch. I hope that between now and the time we look at the tax laws, we will have looked at the totality of this thing. I beg to support."
}