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{
"id": 1590452,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590452/?format=api",
"text_counter": 382,
"type": "speech",
"speaker_name": "Hon. Peter Kaluma",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Hon. David Mboni."
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{
"id": 1590453,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590453/?format=api",
"text_counter": 383,
"type": "speech",
"speaker_name": "Kitui Rural, WDM",
"speaker_title": "Hon. David Mwalika",
"speaker": null,
"content": " Thank you very much, Hon. Temporary Speaker. I wish Hon. Kimani Ichung’wah would stick to the issue of the Finance Bill instead of politicking."
},
{
"id": 1590454,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590454/?format=api",
"text_counter": 384,
"type": "speech",
"speaker_name": "Hon. Peter Kaluma",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Hon. David Mboni, I am the one running the House. Can you make your contribution?"
},
{
"id": 1590455,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590455/?format=api",
"text_counter": 385,
"type": "speech",
"speaker_name": "Kitui Rural, WDM",
"speaker_title": "Hon. David Mwalika",
"speaker": null,
"content": " Very well. As a Member of the Departmental Committee and National Planning, I associate myself with the Finance Bill and the amendments proposed by the Committee. Hon. Temporary Speaker, people mistake the Finance Bill as solely a document aimed at raising revenue. However, the Finance Bill encompasses three main components:Firstly, it seeks to raise revenue to finance the budget. Secondly, it introduces incentives to target sectors in order to attract investment. Lastly, it aims to provide tax relief to income earners, thereby increasing their incomes. The current Finance Bill under discussion is one of the fairest we have had since the last Parliament. The last two Finance Bills aimed to raise over Ksh200 billion each; whereas, this one targets only Ksh24 billion, which is quite fair to the economy. This Bill proposes comprehensive tax reforms aimed at improving efficiency and fairness in the tax system. Key among them is to overhaul tax incentives, which have traditionally favoured few sectors in the economy. If you look at what has been happening, some sectors have been really favoured to the extent that we have state capture in this country; but I will talk about that later. The Bill proposes to align these incentives by limiting VAT ratings strictly to exports, with exceptions only for essential and unprocessed goods. Additionally, it proposes to introduce incentives to priority areas like the tea and coffee sectors. Foreign direct investment in this country has been alarmingly low compared to our neighbouring nations. In 2023, our foreign direct investment amounted to US$750 million, whereas Uganda attracted US$2.3 billion and Tanzania received US$1.5 billion. Given that Kenya boasts a significantly large economy, it is concerning to see such limited foreign direct investment. This Bill seeks to encourage foreign direct investment through the Nairobi International Finance Centre. Individuals investing US$3 billion and above will be entitled to a 50 per cent corporate tax relief for ten years, followed by a 20 per cent relief over the subsequent twenty years. This is a commendable initiative, as it will attract individuals who wish to invest in our country and consequently, creating jobs and increasing income and thereby, fostering economic growth. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1590456,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590456/?format=api",
"text_counter": 386,
"type": "speech",
"speaker_name": "Kitui Rural, WDM",
"speaker_title": "Hon. David Mwalika",
"speaker": null,
"content": "Furthermore, the Bill proposes tax relief on retirement benefits, which includes gratuity and pensions. Those earning pensions and gratuities have served this country. They have spent their lives working and giving them relief on their pensions and gratuities which will increase their disposable income and help them to live a better life. The Bill also proposes to increase the tax-free per diem from Ksh2,000 to Ksh10,000. Currently, Ksh2,000 per diem is tax-free. You are supposed to remit Pay As You Earn (PAYE) for anything above Ksh2,000 because it is considered disposable income. The Bill proposes to increase the limit to Ksh10,000. You will be expected to pay Income Tax on per diem above Ksh10,000. The Bill proposes major clean-ups in Value Added Tax (VAT) on several items, which are being converted from zero-rated to tax-exempt. These include pharmaceuticals supplies, sugarcane, electric bicycles, among others. The effect is that the prices of those products are likely to go up because manufacturers and suppliers are likely to transfer that cost to the final consumer. However, this is aimed at reducing tax expenditure. Tax expenditure in this country has been very high. In 2023, tax expenditure was Ksh510 billion, of which Ksh332 billion was VAT refunds. Our deficit currently stands at Ksh925 billion. If you remove the Ksh510 billion tax expenditure, for example, our deficit will be lower than expected. Tax expenditures are important because they are incentives for manufacturers and investors who come to invest in our country. Therefore, we can still earn income revenues from VAT, but we need to ensure that our tax expenditures are reduced. The Bill proposes access to financial and business secrets. The National Treasury has been including that provision in all Finance Bills since the Finance Bill, 2023. This is a very dangerous provision because if you sleep in a hotel, KRA can get your data to know where you slept and with whom. KRA will know how much money you are depositing in your accounts. Given that there are other provisions in the Bill, especially on the Tax Procedures Act, which give KRA authority to access that data, as my Chairman and the Committee Members said, this provision and data can be misused. Therefore, we declined that provision. Another ongoing issue is the Export and Investment Promotion Levy, which has not been beneficial to exporters. Exports in the last year increased by 2.5 per cent. If you gross it up using inflation, it does not make sense. The Bill proposes a reduction of the Export and Investment Promotion Levy on iron and steel from 17.5 per cent to 10 per cent. We need to further reduce it to five per cent because when we increased the rates on imported billets and clinker, the prices of cement and steel increased. The price of cement rose from Ksh650 to around Ksh900. The Annual Economic Survey indicates that the construction industry shrunk by 0.7 per cent. The building and construction industry shrank by negative 0.7 per cent. These are the effects of the Export and Investment Promotion Levy which is not helping the country. We also understand that money is not reinvested. Rather, it goes to the Treasury where these people cannot access it. Therefore, we need a further reduction of this. On the five-year cap, the Committee has pronounced itself on tax loss due to carry forwards. It takes five years for somebody to invest in putting up a factory worth Ksh2 billion."
},
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"id": 1590457,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590457/?format=api",
"text_counter": 387,
"type": "speech",
"speaker_name": "Hon. Peter Kaluma",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Hon. John Kiarie."
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"id": 1590458,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590458/?format=api",
"text_counter": 388,
"type": "scene",
"speaker_name": "",
"speaker_title": "",
"speaker": null,
"content": "(Hon. John Kiarie spoke off the record)"
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"id": 1590459,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590459/?format=api",
"text_counter": 389,
"type": "speech",
"speaker_name": "Dagoretti South, UDA",
"speaker_title": "Hon. John Kiarie",
"speaker": null,
"content": " Thank you, Hon. Temporary Speaker. Before contributing to the Bill, allow me to say that the events in the streets of Nairobi this afternoon were tragic. The death was needless. I will say no more. At the outset, I thank the Departmental Committee on Finance and National Planning. I congratulate Hon. Kimani Kuria and all the esteemed Members of the Committee. They have burned the midnight oil to present to us a Finance Bill that is generally agreeable and mostly The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1590460,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590460/?format=api",
"text_counter": 390,
"type": "speech",
"speaker_name": "Dagoretti South, UDA",
"speaker_title": "Hon. John Kiarie",
"speaker": null,
"content": "favourable to Kenyans. Much work goes into preparing a Finance Bill. We know that a Finance Bill is new every year. It amends quite a number of laws. We have to commend the Committee for the judicious work they have done in combing through our laws: The Income Tax Act, The Value Added Tax, The Excise Duty Act, The Tax Procedures Act, and all other miscellaneous laws that exist, for them to compile such a good Report that we are debating this afternoon. I see reason to celebrate. That is why I support this Bill. Those of us in the ICT and digital economy sector see a reason to smile. The proposals being made here are going to issue tax incentives on spectrum licence. As you would understand, connectivity as of today, is not a luxury. Even what we used to think of a utility like mobile connectivity, telephony or computer connection through the internet is no longer a luxury. Today, connectivity is a matter of life and death. Even more importantly, the investment that goes to allow connectivity is a very heavy capital investment. We know that a telecommunication company putting up a mast, a tower or anything that has to do with connectivity and even broadband fibre will transfer to the end user who is the public. That is if they could get some relief through tax incentives. For that reason, I stand to support this Finance Bill. Combing through this Report and looking at the proposals made in this Finance Bill, I see that we seek to zero-rate local assembly of mobile phones. Many might not know but we in Kenya today, are moving towards being a device manufacturer. If you visit Dedan Kimathi University of Technology, you shall find young Kenyans assembling mobile phones and tablets. Those will be accessible to Kenyans. Some at a cost lower than Ksh5,000. When this Finance Bill zero-rates local assembly of mobile phones, not only are we increasing accessibility to these devices, but we are also connecting our country further and growing the digital and creative economy by availing affordable gadgets to the hands of local content creators and developers who develop applications. Some of the young people are doing an amazing job of coding solutions for the country to benefit from this Finance Bill if we as a House agree to zero rate local assembly of mobile phones. I can assure you that by that one act of zero-rating the local assembly of mobile phones, we will drastically lower the cost of those that shall be assembled in this country. Hon. Temporary Speaker, this Finance Bill, 2025 proposes that we zero-rate the local assembly of electric motorcycles, bicycles and buses. We do not produce oil. We do not have oil wells in this country. The oil we depend on for fuel is imported at a premium price, at a time when we need to secure our foreign exchange. If we move towards this drive of electric vehicles, we will produce unlimited power. This country produces green power from geothermal. We also produce power from hydroelectricity. So, electric vehicles are a solution today and in the future of this country. I commend the Committee for the judicious work they have done, and listening to Kenyans. They heard some of these extremely innovative and progressive ideas like zero-rating the local assembly of electric motor vehicles, motorcycles, bicycles and buses. When the Chairman of the Committee was moving the Report, I noted the proposal to delete Clause 52 of the Bill. It says that Section 59A of the Tax Procedures Act is amended by deleting subsection (1B). I support the Committee's move in their Report to delete Clause 52 of the Bill. There is a good reason for it. It seeks to delete from our laws a provision in the data management and reporting system. Our laws provide that the Commissioner may establish a data management reporting system for the submission of electronic documents, including detailed transactional data pertaining to these documents. Subsection (1B) of the Tax Procedures Act provide that the Commissioner shall not require a person to integrate or share data relating to trade secrets, and private or personal data held on behalf of customers or collected in the course of business. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1590461,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590461/?format=api",
"text_counter": 391,
"type": "speech",
"speaker_name": "Dagoretti South, UDA",
"speaker_title": "Hon. John Kiarie",
"speaker": null,
"content": "There are two reasons I support the Committee to delete Clause 52 of the Bill. Even if they succeeded in going in this direction, they would not have raised the taxes by allowing the Commissioner to require a person to integrate or share their data relating to trade secrets, and private or personal data that is held on behalf of customers or collected in the course of business. I was part of the formulation of an important Act of Parliament, that is, the Data Protection Act, 2019. I have to report to this House that it is lauded across the globe as one of the most robust data protection laws that is in existence. The Chairperson of the Departmental Committee on Finance and National Planning talked about General Data Protection Regulation (GDPR). It is a standard setter and the data law in the European Union (EU). However, the Data Protection Act, 2019 is even better than GDPR. When we were crafting the law, we looked, searched and spun across the world to see how data laws sat in other jurisdictions, and then integrate the nuances of the Kenyan situation. That is how we came up with such a robust law—Data Protection Act, 2019. We have no business offending what is working. If it is working, there is no reason to fix it. I, therefore, support the Committee's move to delete Clause 52, so that the Commissioner does not require any person to integrate or share data that is relating to trade secrets, but most importantly, to private or personal data. We have gained such good reputation out there because of a matter called adequacy in data laws. Our laws are considered to be adequate. By diluting our laws, we shall run the risk of running into adequacy problems with our data laws. As such, I believe that the move towards allowing the commissioner to access private data shall be faulting our laws, and shall not benefit tax collection. With those many remarks, I support this Finance Bill. I also recommend that any Kenyan who has any issue with this, to first get the facts. This is because the disinformation is rife. The misinformation and the mal-information are out there…"
}
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}