{"count":1608389,"next":"http://info.mzalendo.com/api/v0.1/hansard/entries/?format=json&page=139342","previous":"http://info.mzalendo.com/api/v0.1/hansard/entries/?format=json&page=139340","results":[{"id":1409821,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1409821/?format=json","text_counter":604,"type":"speech","speaker_name":"Hon. Speaker","speaker_title":"","speaker":null,"content":"witnesses. Additionally, the Committee must always remain decorous and civil towards the parties that appear before it. In line with the requirements of Article 152(7)(b) of the Constitution, I wish to reiterate that the Committee should submit its report to the House within ten days of its formation. Computation of the timeline in accordance with the provisions of Article 259(5) and 259(7) of the Constitution requires the Committee to submit its report on or before Monday, 13th May 2024. Thereafter, I shall invoke the provisions of Standing Order 66(3) and summon the House for a Special Sitting for the tabling of the Report and disposal of the matter in accordance with the provisions of Article 152(9) of the Constitution. The Select Committee and the House stand guided. Thank you. Next Order."},{"id":1409822,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1409822/?format=json","text_counter":605,"type":"heading","speaker_name":"","speaker_title":"","speaker":null,"content":"MOTION"},{"id":1409823,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1409823/?format=json","text_counter":606,"type":"heading","speaker_name":"","speaker_title":"","speaker":null,"content":"ADOPTION OF REPORT ON RATIFICATION OF THE MULTILATERAL CONVENTION TO IMPLEMENT TAX TREATY RELATED MEASURES TO PREVENT BASE EROSION AND PROFIT SHIFTING"},{"id":1409824,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1409824/?format=json","text_counter":607,"type":"speech","speaker_name":"Molo, UDA","speaker_title":"Hon. Kuria Kimani","speaker":null,"content":" Hon. Speaker, I beg to move the following Motion: THAT, this House adopts the Report of the Departmental Committee on Finance and National Planning on its consideration of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, laid on the Table of the House on Tuesday, 30th April 2024 and, pursuant to the provisions of Section 8(4) of the Treaty Making and Ratification Act, 2012, approves the Ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, subject to reservations on Article 5 (Application of Methods for Elimination of Double Taxation) and Article 16 (Mutual Agreement Procedure). Hon. Speaker, first, I wish to extend my gratitude to you, and the Clerk of the National Assembly, for the support you accorded to us during the consideration of this convention. In the same light, I applaud the Members of the Committee for efficiently and, as always, canvasing the Multi-Lateral Instruments (MLI). I also thank the secretariat for always being diligent in their support of the Committee. The Committee further wishes to commend the following institutions for submitting their views on the convention: 1. The National Treasury and Economic Planning; 2. The Law Society of Kenya; 3. PricewaterhouseCoopers (PWC); 4. Bowmans LLP; 5. Anjarwala and Khanna Advocates; 6. PKF; 7. RSM (Eastern Africa); 8. Ernst & Young; 9. Okoa Uchumi; 10. KEPSA; 11. ICPAK; and many other institutions that have always endeavoured to provide their views to our Committee every time we have had a matter under our consideration."},{"id":1409825,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1409825/?format=json","text_counter":608,"type":"speech","speaker_name":"Molo, UDA","speaker_title":"Hon. Kuria Kimani","speaker":null,"content":"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":1409826,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1409826/?format=json","text_counter":609,"type":"speech","speaker_name":"Molo, UDA","speaker_title":"Hon. Kuria Kimani","speaker":null,"content":"Over the last ten years, there has been a growing concern about the use of tax avoidance strategies by multinational enterprises that exploit gaps and mismatches in national tax laws to shift profits to low or no-tax jurisdictions where there is little or no economic activity. This is referred to as Base Erosion and Profit Shifting (BEPS). In response to these concerns, the G20 and the OECD, together with many advanced and developing countries and regional tax bodies, have been working to develop new rules and processes to strengthen the international tax system and tackle tax avoidance. The result is a multinational instruments treaty that is being born today. This group of companies is referred to as the Inclusive Framework on BEPS, of which Kenya became a member in January 2017. It consists of 140 countries and jurisdictions. The inclusive framework has allowed Kenya to work on an equal footing with other countries to tackle tax avoidance by developing recommendations that are aimed at realigning taxation with the location where economic activity takes place and value is created. What is the rationale of MLI? The approval of this ratification on the multilateral instruments will put in place measures to curb double tax agreements, enhance clarity on taxation of partnerships to ensure that there is no evasion of taxes, make dispute resolution mechanism more effective, and broaden the tax base by ensuring that multilateral enterprises do not avoid taxation on the basis of their activities in the country. This has been done through avoidance of permanent establishment status. In addition, the ratification of MLI will improve Kenya's efforts to improve resource mobilisation for enhanced financing of the public sector and other development needs. In particular, MLI measures will ensure the protection of Kenya's tax base. This has especially given Kenya a high reliance on corporate income tax revenues in comparison with more developed countries. The MLI is by far a more prudent option than pursuing bilateral negotiations of Kenya's existing domestic DTAs, which would be lengthy, expensive and protracted processes. Negotiation of DTAs typically takes around 24 months. Kenya signed the MLI on the 26th of November 2019 and, thereafter, the Cabinet on 21st of March 2023 approved the ratification of the multilateral instruments. The difference between when Kenya signed the MLI and when the Cabinet ratified the same is a record four years. This shows the commitment of the Kenya Kwanza Administration in pursuing the recognition of Kenya in the global space as an economic leader. It is, therefore, no surprise that we have seen the United States Congress inviting His Excellency President William Samoei Ruto to address them because he has been at the forefront of marketing Kenya as an economic leader. This shows that when this administration came into office, it only took a few months before the ratification of this MLI which had otherwise taken a whole four years for its ratification. As of February 2024, 102 jurisdictions had signed the MLI while 85 had ratified it. If this House agrees with our Committee on the adoption of this Report, Kenya will be the 86th country to ratify this treaty."},{"id":1409827,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1409827/?format=json","text_counter":610,"type":"speech","speaker_name":"Molo, UDA","speaker_title":"Hon. Kuria Kimani","speaker":null,"content":"Kenya currently has bilateral tax agreements in force with Canada, Denmark, France, Germany, India, Iran, Norway, Korea, Qatar, the United Kingdom (UK), South Africa, Sweden, the United Arab Emirates (UAE), Seychelles and Zambia. This Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) allows Kenya to re-look at existing double taxation agreements (DTAs) that are interpreted to eliminate double taxation without creating opportunities for non-taxation or reduced taxation. Many of those DTAs with our partner States are either outdated or were signed many years ago, and are, therefore, unrealistic to even implement. Under the Convention, jurisdictions are allowed to make reservations and notifications in line with their policy preferences. Notifications indicate the provisions of the MLI that a"},{"id":1409828,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1409828/?format=json","text_counter":611,"type":"speech","speaker_name":"Molo, UDA","speaker_title":"Hon. Kuria Kimani","speaker":null,"content":"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":1409829,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1409829/?format=json","text_counter":612,"type":"speech","speaker_name":"Molo, UDA","speaker_title":"Hon. Kuria Kimani","speaker":null,"content":"jurisdiction intends to adopt. Reservations indicate the provisions which it does not intend to adopt. The MLI has a total of 39 Articles on various subject matters. Kenya has agreed to 37 of those Articles. Therefore, we will submit a notification in this regard. However, Kenya has reservations on two Articles in this MLI, namely, Articles 5 and 16. Over and above the costs of the legislative proposals, no costs for this particular Convention on this Treaty are anticipated on the Government of Kenya as a result of this MLI. Therefore, upon ratification, the MLI will form part of Kenya's domestic law. Kenya has expressed its intention to place a reservation for the entirety of Article 5 of the MLI not to apply with respect to all its covered tax agreements (CTAs) since Kenya's domestic law as well as DTAs apply the credit method for elimination of double taxation instead of what is proposed in the MLI, which is the exemption method. Kenya places a reservation against the provisions to file a Mutual Agreement Procedure (MAP) in either of the contracting States. Instead, the taxpayer will be allowed to file a case where he is resident, and that State will notify the other State. This is also because the resident State can give unilateral relief. Kenya chooses not to apply Part VI of the MLI, which contains provisions on mandatory binding arbitration. This is mainly due to the constraints that this particular Part will place on our country in terms of costs and capacity. The Convention is aligned to the Constitution. Further, the reservation of Articles 5 and 16 of the Convention does not negate any Article of our Constitution. With those few remarks, I beg to move and request Hon. (Dr) CPA CS Ariko to second the adoption of this Convention."},{"id":1409830,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1409830/?format=json","text_counter":613,"type":"speech","speaker_name":"Turkana South, ODM","speaker_title":"Hon. John Namoit","speaker":null,"content":" Thank you, Hon. Temporary Speaker. I rise to second."}]}