Hon. Members

Hon. Members I have a Communication on the consideration of the Privatisation Bill (National Assembly Bill No.22 of 2023). Hon. Members, you will recall that during the afternoon Sitting of Tuesday, 13th June 2023, the Minority Whip, Hon. Junet Mohammed, CBS, MP, rose on a point of order and sought the indulgence of the Chair on the manner in which the Privatisation Bill (National Assembly Bill No.22 of 2023) should be considered by the committees of the House. The Hon. Minority Whip was of the view that public participation to be conducted on the Bill, which I referred to the Departmental Committee on Finance and National Planning, ought to be done jointly with the Public Debt and Privatisation Committee. I undertook to provide some direction on this. The Privatisation Bill (National Assembly Bill No.22 of 2023) was published on 24th May 2023 and sponsored by the Leader of the Majority Party, Hon. Kimani Ichung’wah, MGH, MP. The principal objective of the Bill is to provide a revised regulatory framework for the privatisation of public entities to improve the efficiency and competitiveness of Kenya’s productive resources. The Bill further seeks to provide for the coordination and oversight of privatisation matters. Standing Order 216 establishes the departmental committees of the House and assigns them specific functions. Paragraph 5(c) of the Standing Order expressly provides that the Departmental Committee shall study and review all legislation referred to it. Additionally, Standing Order 127(1) provides that a Bill, having been read a First Time, shall stand committed to the relevant departmental committee. As such, Standing Order 127 as read together with Standing Order 216(5) requires the committal of a Bill for scrutiny and conduct of public participation to a departmental committee by default. This is primarily informed by the sector-specific and subject matter mandate assigned to each departmental committee by Standing Order 216(5) (c) and the Second Schedule to the Standing Orders. Nevertheless, Hon. Members, the House has established exceptions to this rule through precedent and practice. The Speaker has referred Bills to select committees of the House for scrutiny in specific instances. A case in point is the practice of the House of referring any proposal to amend the National Government Constituency Development Fund (NG-CDF) to 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.

the Select Committee on NG-CDF. The decision is informed by the specialised mandate and functions assigned to the select committee and the unique background and content of the proposals in the Bill.

Hon. Members take the nearest seats. Hon. Mbadi and I attended different schools of English.

Indeed, Hon. Members, we recall that, at the beginning of the 13th Parliament, I referred the Statutory Instruments (Amendment) Bill, 2022, the Parliamentary Powers and Privileges (Amendment) Bill, 2022, the Petitions to Parliament (Procedures) (Amendment) Bill, 2022 and the Public Finance Management (Amendment) Bill, 2022, which are sponsored by the Deputy Speaker, Hon. Gladys Boss, MGH, MP to the Procedure and House Rules Committee owing to their unique background. The four Bills all sought to implement various recommendations made during the review of the Standing Orders at the tail end of the 12th Parliament. Similarly, I recently referred to the Public Finance Management (Amendment) Bill (National Assembly Bill No.16 of 2023) sponsored by the Leader of the Majority Party to the Public Debt and Privatisation Committee. Ordinarily, any amendment to the Public Finance Management Act falls squarely within the mandate of the Departmental Committee on Finance and National Planning. In that case, the referral to the Public Debt Committee was informed by the contents of the Bill which seek to operationalise the framework for monitoring the level of public debt. You will agree with me that the House would greatly benefit from a scrutiny of the Bill by a committee that specifically deals with the issue of debt. Hon. Members, the Second Schedule of our Standing Orders outlines the subject matter of mandates of departmental committees. The Schedule outlines subjects falling under the mandate of the Departmental Committee on Finance and National Planning as public finance, public audit policies, monetary policies, financial institutions (excluding those in securities exchange), economy, investment policies, competition banking, insurance, national statistics, population revenue policies including taxation, national planning and development, digital finance, including digital currency. The mandate of the Committee is sector-wide and allows it to exhaustively consider finance related matters, including legislation.

On the other hand, Standing Order 207A establishes and outlines the functions of the Public Debt and Privatization Committee. Paragraph (2)(f) mandates the Committee to oversee the privatisation of national assets. The mandate of the Public Debt and Privatization Committee with regard to privatisation is narrower when compared to the mandate of the Departmental Committee. Whereas the Departmental Committee is mandated to consider all aspects relating to public investments, the Public Debt and Privatization Committee is only mandated to oversee any proposed plan to privatise national assets

Pursuant to the provisions of Standing Order 127(1) as read together with Standing Order 216(5)(c), I am of the view that the consideration of the Privatisation Bill (National Assembly Bill No.22 of 2023) and facilitation of public participation of the Bill falls squarely and exclusively within the mandate of the Departmental Committee on Finance and National Planning. Standing Order 127(3) allows a Committee to which a Bill is referred to consult experts on technical subjects while facilitating public participation. I urge the Departmental Committee on Finance and National Planning to invoke this position, extend an invitation to their counterparts, and consider their technical input as part of the public participation exercise. In conclusion, I guide as follows: 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.

1. That, Standing Order 127 as read together with Standing Order 216(5), by default, requires the committal of a Bill for scrutiny and conduct of public participation to a departmental committee. 2. That, as an exception to the rule in (1) above, the House has referred certain Bills to select committees on account of the specialised mandate and functions assigned to the select committee and the unique background and content of the proposals in the Bill. This informed the recent referral of the Public Finance Management (Amendment) Bill, (National Assembly Bill No.16 of 2023) to the Public Debt and Privatisation Committee. 3. That, pursuant to the provisions of Standing Order 127(1), as read together with Standing Order 216(5)(c), consideration of the Privatisation Bill (National Assembly No.22 of 2023), and facilitation of public participation on the Bill falls squarely and exclusively in the mandate of the Departmental Committee on Finance and National Planning. 4. That, in its consideration of the Privatisation Bill (National Assembly Bill No.22 of 2023), the Departmental Committee on Finance and National Planning is at liberty to invoke the provisions of Standing Order 127(3) and invite the Public Debt and Privatization Committee to share any technical input. I thank you. Next Order.

Order, Hon. Members. Take your seats. I have a Message from the Senate. Hon. Koech and colleagues, take the nearest seats.

On a point of order.

Yes, Hon. Jared. What is out of order?

Nothing is out of order. Everything is in order Hon. Speaker. But Hon. Speaker, the Constitution came up with the Equalisation Fund and if we read that Constitution properly, it was also time-bound. It has been 10 years since the advent of county governments and we also have 10 more years before the end of the Equalisation Fund. What happened was that there were two warring factions on who should implement issues of the Equalisation Fund. The county governments thought that, that was money meant to be sent to those respective counties that qualified for the Equalisation Fund. Yet, again, through line ministries in the Executive, they thought that, that was money to be controlled by the Executive through respective line ministries. This matter went to court and I am not sure whether the determination has already been made by the courts of law as to who should implement those funds. Again, the idea behind the Fund was to bring everybody at par in terms of development, but we have had an inordinate delay for 10 years and the Fund was to last for 20 years. So, we only have 10 years to go if that constitutional dictate is anything to go by. I do not know whether 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.

the courts have already pronounced themselves on this subject and, if so, who will then be implementing all the projects under the Equalisation Fund?

I thank you.

Thank you.

Order, Hon. Members. I can fully appreciate the levels of excitement in the House. Hon. Jared Okello has raised a very important point. The Equalisation Fund, for those of us who participated in the drafting and promulgation of the 2010 Constitution, was never meant to be a devolved fund. It was a Fund that also had a sunset of 20 years. Ten years have gone without the money being put to any use because of the ping-pong between this House and the Senate. Each House wanting to be the anchor for the Fund. We also had some dysfunctional activities in the National Government on this Fund. It was originally meant to benefit counties that were presumed and believed to be marginalised, particularly in northern Kenya. Eventually, it was decided by this House, the Senate and the Commission on Revenue Allocation (CRA) that the Fund will be applied to pockets of marginalisation in all counties of the country as they were identified. In fact, the area of focus became the sub-location. So, they have spread the money so thin across the country, from Nairobi to Mandera, Turkana, Migori and everywhere. Now that the Fund is available and we have only 10 years to go, I want to encourage this House, because this is a National Government Fund, to ensure that once this Bill is passed and assented to, you have that money to go to the ground to benefit the marginalised people.

You also know that under the Constitution - and Senior Counsel, Hon. Amollo can bear me witness in this - we defined which areas of intervention this Fund was to go to. It was not to go to anything and everything. But I get the impression that it has now been whittled down to go to anything and everything which, again, as a House, you have a duty to ensure that marginalisation means marginalisation, and the marginalised means the marginalised, and not everybody else. Thank you, Hon. Okello.

On the same issue? Yes, Hon. Junet.

Hon. Speaker, this is a very important Bill as you said. It is a very important Bill that many Kenyans have been waiting for. Now that we are seized of the Bill, I want to urge the House to look at this Bill critically. As you have just alluded to, the way they have crafted the manner in which the money is supposed to be shared is really shocking. I do not know whether it has come to your attention or if you have seen. Even sub-locations that will not receive rain for two months qualify to be marginalised. Some of them are here in Nairobi. I do not know how a sub-location in Nairobi can be marginalised.

It is really shocking! Those people who did that division; how to divide the money… How can you be marginalised while you live in Nairobi of all the places? You can be hungry 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.

in Nairobi and may need food, stipend and such things, but in the sense of marginalisation, you cannot be marginalised in Nairobi. So, there was a sinister motive. Actually, what caused the delay for the last 10 years is that there are people who have refused to let go of that money, and they know themselves. I do not need to mention their names on the Floor of the House. They have refused to let go. When this country got the new Constitution and went to the devolved system, some people realised that there was equitable revenue share which was in the vison of the makers of the Constitution, and which was meant to lift the standards of people who do not get enough revenue in the equitable sharing. It was an intervention fund, not an entitled fund. Now people are turning it to a Fund that is entitled to everyone. Hon. Speaker, I just want to put on record that the way it was being done is wrong, and the House must look at it this time afresh. The people who deserve it must get it. I am told even Githunguri has been listed as a marginalised place. There is nothing like that.

Order, Hon. Members. We rarely open a Message from the other House for debate and we will leave it there. The Bill is listed for First Reading. It will come for Second Reading shortly, and those of you with strong views on the issue, be ready to debate the Bill. But as I told you, the delay in the disbursement is because of the ping-pong between the many players, including this House.

Hon. Members, allow me to recognise a delegation from the National Assembly of the Republic of South Africa who are seated in the Speaker’s Gallery. The delegation comprises Members of the Chief Whip’s Forum. They are: 1. Ms. Pemmy Majodina, MP, Chief Whip of the Majority Party – Leader of the Delegation. 2. Ms. Mmatlala Boroto, Member of Parliament, House Chairperson – Internal Arrangements, National Assembly. 3. Dr Gerhardus Koornhof - Member of Parliament, Parliamentary Counsellor to the President. 4. Ms. Siviwe Gwarube – Member of Parliament, Chief Whip of the Opposition Party (DA). 5. Mr. Steven Swart - Member of Parliament, ACDP. 6. Mr. Nqabayomzi Kwankwa – Member of Parliament, UDM. 7. Mr. Ahmed M. Shaik-Emam – Member of Parliament, NFP. Hon. Members, the delegation is accompanied by three Parliamentary Officers. The delegation is on a visit to benchmark with their counterparts in the leadership offices and to explore ways to enhance their work as party functionaries and office bearers. Hon. Members, on my own behalf and that of the National Assembly, I welcome them to Parliament and wish them fruitful engagements during their stay in the country. I thank you.

Next Order.

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Leader of the Majority Party.

(Kilifi North, UDA)

Thank you, Leader of the Majority Party. Chairperson, Departmental Committee on Housing, Urban Planning and Public Works.

(Emurua Dikirr, UDA)

Thank you, Hon. Johana. The Chairperson, Public Investments Committee on Governance and Education.

(Bumula, DAP-K)

Chairperson, Budget and Appropriations Committee, Hon. Ndindi Nyoro.

(Kiharu, UDA)

Next Order. Chairperson, Public Investments Committee on Governance and Education.

(Bumula, DAP-K)

Chairperson, Budget and Appropriations Committee.

(Kiharu, UDA)

You are supposed to give a notice there. Hon. Ndindi Nyoro.

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(Kiharu, UDA)

Hon. Wanami, the Clerk informs me that …

(Bumula, DAP-K)

I have not finished. The Clerk informs me that you gave your notice of Motion on the first limb and omitted the second limb. Can you complete the sequence? For the neatness of Hansard, just give your Notice of Motion from Abinitio – from the start.

(Bumula, DAP-K)

Thank you, Hon. Wamboka. Hon. Members, allow me to acknowledge the following schools in the Speaker’s Gallery and the Public Gallery: Chogoria Boys from Maara Constituency, Tharaka-Nithi County; Ndururumo Boys from Laikipia West Constituency, Laikipia County and Materi Girls from Tharaka Constituency, Tharaka-Nithi County.

On your behalf and my behalf, I welcome the students and their teachers to the House of Parliament.

Next Order.

Chairperson, Budget and Appropriations Committee, Hon. Ndindi Nyoro.

Hon. Speaker, I beg to move the following Procedural Motion: THAT, pursuant to the provisions of Standing Order 120, this House resolves to reduce the publication period of the Appropriation Bill, (National Assembly Bill No.27 of 2023), from seven days to four days.

The essence of this request is based on the fact that this June and all months of June in the calendar, are usually very consequential with regard to the management of public resources. It is the same month that we consider the Finance Bill, Budget Estimates and the Second Supplementary Budget when it is there. That is the reason I am requesting that we reduce the publication period, so that even the Second Supplementary Budget that we will move will be of consequence as we move to 30th June.

I request the Member for Chuka/Igambang’ombe, Hon. Patrick Munene, to second.

Hon. Patrick Munene.

Thank you, Hon. Speaker. I stand to second the Motion on the reduction of publication period of a Bill. First, I wish to thank the Budget and Appropriations Committee and all Members of this House. It has really been a busy time for this Parliament. We went through the Budget Estimates, and now we are considering the Finance Bill. As we come to the close of this Financial Year in June, there are very many things that we, as a country, need to do and address. Based on those things, I support the Mover. We need to shorten the publication period of this important Bill to allow it to go through the House and the country to move on as we close the Financial Year. Finally, on behalf of Tharaka-Nithi County, I wish to welcome Chogoria Boys and Materi Girls in the House. Thank you, Hon. Speaker.

Thank you, Hon. Munene. If I were you, I would have extended the welcome to all the three schools.

Next Order.

Hon. Ndindi Nyoro.

Hon. Speaker, I beg to move that the Appropriation Bill, (National Assembly Bill No.27 of 2023), be now read a Second Time. The essence of this Bill that we are…

Order, Hon. Ndindi! Hon. Members, the Bill being moved by the Chairman of the Budget and Appropriations Committee will be allocated not more than 45 minutes. After he moves and it is seconded, I will give an opportunity to the Leader of the Majority Party and the Leader of the Minority Party. If need be, I will also give an opportunity to one or two more Members and then we will move to Order No.13. I am doing this for the simple reason that the Bill is a replica of what you did in the Committee of Ways and Means in the House. It does not have new material that requires extensive debate. However, I will see how it goes. I want you to go to the Committee of the whole House latest by 4.00 p.m. Hon. Ndindi, proceed.

Thank you, Hon. Speaker for the chance. For the neatness of the Hansard, allow me to do it again. I beg to move that the Appropriation Bill, (National Assembly Bill No.27 of 2023), be read a Second Time. Hon. Speaker, the reason we are introducing this Bill is to align the Government spending as we come to the close of the 2022/2023 Financial Year. I really thank the Members of the Budget and Appropriations Committee and the relevant departmental committee Chairs. They rose to the occasion to consider the contents of this Bill over the weekend, which culminated to what we did early this morning and what we are doing now. The Bill in not far- reaching because we are just aligning what the Government will be collecting as revenue with the expenditure as we come to the close of the Financial Year. One of the issues we have considered is the absorption rate of various Ministries, Departments and Agencies (MDAs). Many a times, we appropriate money and some MDAs get huge sums of funds that they cannot absorb. As we come to the close of the Financial Year, we have to consider that fact. We have to put money where it can be absorbed. Therefore, it is more of a realignment of the Government fiscals so that we close the Financial Year with a neat budget. As I previously read, the amount we are considering is a total sum that is shy of Ksh30 billion. That amount in comparison to the size of the budget is marginal. Some of the areas we have considered for increment… Hon. Speaker, I beg, if possible, that Members consult in low tones.

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Order, Hon. Members! Hon. Wamuchomba and your team around there, tafadhali muongee kwa sauti ya chini . You are disrupting the flow of thought of the Member on his feet. Go on.

Thank you, Hon. Speaker. You know, when the Hon. Member for Kiambaa whispers, it is a loud voice. He is very gifted in public speaking and whispering. Some of the areas that we considered for increment include the water sector. One of the projects that has stalled there for a very long time is Thwake Dam. We allocated Ksh5 billion to it as we came to the close of the Financial Year because it has the absorption capacity. We have also highlighted a few things in the irrigation and water sector, ICT, security and several other MDAs in regard to the Supplementary Estimates No.2. As I come to the close, I know we have a lot of business to transact today and I do not want to belabour that point. Now that I have the microphone and a majority of the Members of this House were not there when we said some things, especially when we were considering the budget estimates of 2023/2024 Financial Year, allow me to highlight the following now that we are still dealing with the budget process. As we consider the Supplementary Estimates, there are important things that I wish to bring to the attention of the Members that are different from the Budget that was read of Ksh3.679 trillion in the 2022/2023 Financial Year. From the money that we have appropriated, over and above appropriating a huge budget to education, we have also doubled the allocation to Higher Education Loans Board from Ksh15 billion to Ksh30 billion. We have allocated money for hiring 8,000 fresh graduates to Government internship programme where interns will be paid a stipend of Ksh25,000. In the same Budget for the 2023/2024 Financial Year, we have allocated Ksh10 billion to the NG-CDF where every constituency will be getting Ksh25 million to Ksh40 million every financial year. As I move the Appropriation Bill, it is important for Members to understand that it incorporates whatever we discussed last week. I have only highlighted the issue of the Supplementary Estimates because it will be coming along. The Bill I am moving is the Appropriation Bill with regard to the debate we had last week. I request Hon. Tongoyo to second.

Hon. Tongoyo.

Thank you, Hon. Speaker. I stand to second the Appropriation Bill. Approving this Bill will allow the MDAs to perform their duties with the funds appropriated and remitted by the national Treasury to them. I beg to second.

Order, Hon. Jared!

Hon. John Mbadi, I will give you three minutes.

Thank you, Hon. Speaker. Unfortunately, I was not present when the Committee of Ways and Means was deliberating on various vote-heads. However, in the short time that you have allocated me, I will just highlight a few things. I am worried about this Budget. When President Ruto took power, he said that he was going to reduce the 2022/2023 Financial Year budget by Ksh300 billion. That has not happened. Instead, what we are seeing today is an increase of Ksh544 billion in the 2023/2024 Financial Year Budget from the Budget of 2022/2023 Financial Year. The total budget is rising from Ksh3,055,000,000,000 to a total of Ksh3,059,000,000,000 without considering the debt rollover. 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.

If you look at this Budget, you will see that it is broken down into Executive expenditure, Parliament, Judiciary and other Consolidated Fund Services (CFS). The financing of this Budget is going to be a challenge. This country is deluding itself that it can raise ordinary revenues from Ksh1,917,000,000,000 in the current Financial Year to Ksh2,571,000,000,000 in the next Financial Year. That is an increase of Ksh653 billion. That is very ambitious and unrealistic. It will likely not be realised. The total revenue projected to be collected is going to rise from Ksh2.23 trillion to Ksh2.935 trillion. That is an additional Ksh705 billion. Even with the crazy taxation measures that are proposed in this House, you cannot realise an increase in collection of revenue to the tune of Ksh700 billion in a single financial year.

Hon. Speaker, I know the increase in revenue collection has been averaging around Ksh300 billion. If we are unable to raise the revenue to Ksh700 billion, what will happen is either the programmes will not be implemented or if they are implemented, it will be at a cost. This means we are going to increase the budget deficit from the proposed Ksh635 billion to almost Ksh1 trillion. This is not far-fetched because from 30th September 2022 to 31st March 2023 - in a period of just six months - the Kenya Kwanza Government has borrowed Ksh689 billion compared to a similar period when President Uhuru was in power and only Ksh405 billion was borrowed.

The talk we hear all the time, that Kenya Kwanza is fighting cartels and managing debts is hypocritical and theoretical. The actual fact is that Kenya Kwanza is borrowing more monies than what the former President Kenyatta borrowed. So, we are headed to a situation where this country is going to face financial distress. Hon. Speaker, I want to stop there but my concern is that this Budget is not likely to be financed from the revenue projections we have. Thank you.

Leader of the Minority Party.

Hon. Speaker, let me make a few comments on this Bill. First and foremost, it is obvious that, as a country, we are still being too optimistic. We seem to be doing the same things year in, year out, and expecting different results. Looking at the Budget for the Financial Year 2023/2024, what will happen is the usual things. One, we are going to start projects which we will be unable to complete. Two, where we start projects, we will incur further pending bills. As you can see from the current Budget, not much money has been allocated to service pending bills. We will basically be digging a hole to seal another one.

I have always said that the most prudent thing to do when you find yourself in a situation like the one, we are currently in, is to cut your cloth according to your size. We have failed to do that. We have continued to increase our budget hoping that we shall get revenue from elsewhere. The other thing we need to do when we are in a similar situation is not to start new projects which are not an emergency and critical, but attempt to complete the old projects. We are not seeing that in this budget because unless we deal with the pending bills, how will we complete the old projects?

Hon. Speaker, as I conclude, I am more concerned and I have tremendous respect and confidence in the Chairman of the Budget and Appropriations Committee. There is a problem which we are beginning to see rearing its ugly head in this country. The type of mega corruption cases we are beginning to see is a cause for worry. In a mere seven months or so, we have seen corruption cases that should worry all of us, like the mosquito nets case. Some of us who come from malaria prone areas understand the sensitivity of this matter. We have people in the Government, and some in high places like the Cabinet, conniving to siphon money that is meant to buy mosquito nets.

Hon. Speaker, the second issue is the condemned sugar. We do not know as yet what became of the sugar which was condemned and stolen from our own warehouses. This is a matter that should concern this House, if not anything else. The third issue is the latest scandal 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.

on the edible oils which is running into billions of Kenya shillings. There is only one thread that is running across all those scandals, and that is the involvement of people in high places; some in this House, but most of them in the Cabinet. This is an issue this House must deal with head on if we are to save this country from sliding into an abyss. I challenge the committees, especially those that deal with accounting matters, to take up these matters with the seriousness they deserve. Otherwise, failure to do something urgently and drastically, this term of Parliament may go down in history as one that witnessed the highest number of mega scandals in this country. Hon. Speaker, with those few remarks, I rest my case. Thank you.

Leader of the Majority Party.

Thank you, Hon. Speaker. I rise to support the Appropriation Bill. I will restrain myself from speaking to the gallery and answering the many things that the Leader of the Minority Party has spoken to. It is within his right to play to the gallery and raise issues that may not be in the Appropriation Bill. Hon. Speaker, if you will allow me, one of the issues I have heard being mentioned is the question of monies being allocated in this Appropriation Bill.

On a point of order, Hon. Speaker.

Yes, what is your point of order?

Hon. Speaker, is it in order for the Leader of the Majority Party to term the discussion and opinions of the Leader of the Minority Party as ‘play to the gallery’? Is that in order?

The Leader of the Minority Party is not protesting. Go on.

Hon. Speaker, it is good to indulge that Member because he was simply seeking attention. I have the Leader of the Minority Party attention and I do not need his. The question of pending bills in this Appropriation Bill is simply being addressed by what we did during the Committee of Supply. I must thank all the Members who stayed until about 10.00 p.m. to supply resources to the MDAs. Indeed, in this Appropriation Bill, what we supplied to our MDAs is true. For instance, the largest pending bills are in the roads sector. All Members in this House will tell you that in their constituencies, either there is a road that was to be constructed and is yet to be started, or a road that was constructed but stalled because of the pending bills. The quantum of those pending bills, if Members cared to listen to the Chairman of the Budget and Appropriations Committee, was close to Ksh1 trillion. This means that half of the resources we generate in terms of ordinary revenue can only go towards the settlement of pending bills in the roads sector. Amidst all the constraints we have with our resources, the Budget and Appropriations Committee and the House last week in the Committee of Supply supplied a quantum of Ksh250 billion shillings to the roads sector to help in dealing with pending bills. Hon. Speaker, with time, you will see the exchequer releases hopefully after the month of July. If we agree with the Chair of the Departmental Committee on Finance and National Planning, we can finish the Third Reading of the Finance Bill today or tomorrow. Then, we will generate adequate revenue to unlock the issue the Leader of the Majority Party rightly raised about pending bills. Ksh250 billion shillings to the roads sector is not enough even after rationalising all the committed road projects with a figure of about Ksh730 billion. Hon. Speaker, I just want to inform the House and the Hon. Leader of the Minority Party that we are not dealing with new road projects. We are dealing with those already committed road projects. We either commit the entire of our development expenditure to the road sector without dealing with anything else, or we do what the Budgets and Appropriations 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.

Committee (BAC) recommended that we allocate Ksh250 billion this year. If we perform better in terms of revenue allocations next year, we can do another Ksh300 to Ksh400 billion. By the third year of this administration, we should have cleared all those pending bills and contracts that have already been committed to and embark on new projects. Allow me to inform the Hon. Leader of the Minority Party that there are no new road projects. We are committed to completing those that were committed contractually by the last regime. If you look at the education sector and Members will remember, when we began this Session in January, our children had just opened school and there was a crisis in the Competency-Based Curriculum (CBC). The capitation of JSS was a big problem. In this Appropriations Bill, we are appropriating a whooping Ksh630 billion to the education sector to ensure that we actualise the CBC and committing resources to the system. It is not just JSS, but even capitation of our day secondary schools and our boarding schools. It is to ensure resources get to our free primary school sector. There is money that has been appropriated to the social services sector. You have seen that in the Press recently, as much as our media houses have a quarrel to pick with us. Therefore, they will go to great lengths to demonise what is being done or what is supposed to be done. They will eloquently carry out investigative series on how many octogenarians have not received their cash transfer schemes. However, I have never seen them cover when they are receiving that money. I want to tell them that we are appropriating adequate resources to ensure that our elderly and vulnerable in society are able to access their money, including orphans and people with disabilities in our communities that access money from the Government. We have allocated adequate resources within the social services sector to ensure that all those people access the money.

On a point of order, Hon. Speaker.

Yes Hon. Jared Okello. Order, Hon. Kimani Ichung’wah.

I know what Hon. Jared Okello wants to say.

Hon. Speaker this new emerging character of disparaging the media that does nothing but to shine bright light in the dark corners of Government should stop.

What is the point of order?

We get informed through the media. We also get news through the media. If somebody has beef to pick with the media, they have professional bodies around the media houses.

What is the point of order Hon. Jared Okello?

My point of order is to ask Hon. Kimani Ichung’wah, together with his surrogates, to stop disparaging the media. The media plays an important role in this country and the world at large. Thank you.

Proceed, Hon. Kimani Ichung’wah .

Hon. Speaker, allow me to ignore what warrants to be ignored. In conclusion, we have allocated immense resources to our own pet subject of NG-CDF. NG-CDF is misconstrued out there to be money that belongs to these Members. NG-CDF is money that belongs to our voters - the people who have sent us to this House. The resources that have been devoted to NG-CDF this financial year will not only go to supplement what has been devoted through the Ksh630 billion that is going to the Ministry of Education, but also to supplement our bursary schemes in our constituencies. This is to ensure that the children who have been committed to schools and are getting school capitation, that school capitation is not adequate and, therefore, those children need school bursaries. 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.

We are talking about digital hubs in our constituencies. The Information and Communication Technology Committee will be briefing Members on Government intention to establish Information and Communication Technology (ICT) Innovation hubs in every ward in our constituencies in the next financial year. As we retreat for the short recess, which I know many of the Members will retreat to do their proposals; as you engage with the members of the public, it is good to inform them that there are those innovation hubs in each of the wards, so that you devote, in your NG-CDF proposals and budget, a bit of money for construction and equipping of those ICT hubs. The Government, through the ICT Authority, has adequate digital equipment, computers and also ensuring that there is connectivity in those ICT hubs, so that we also help our young men and women in our constituencies who have no jobs to be trained under the Jitume programme. This will enable them to access online jobs, work from ICT hubs, work from home and access online jobs even outside the country. I visited Sot Technical Training Institute in Bomet County. I do not know if the Member of Parliament for Bomet Central is here. I was impressed with the kind of work, where you find students, 21 to 24 years old, working online and earning their $20 to $25 an hour and they are working right from their own classrooms in those ICT hubs. Therefore, even with the establishment of such hubs in all our Technical and Vocational Education and Training institutes (TVETs) in the constituencies, I encourage those who are yet to start TVETs in their constituencies to do so. I saw a number of Members during contributions in the Second Reading of the Budget and Appropriations Report pointing out that they have no TVETs in their constituencies. Please, in your NG-CDF allocation this year, allocate money. The Ksh10 million is required from NG-CDF so that you can get the counterpart funding from the Ministry of Education for those TVETs and establish those ICT hubs. They will go a long way in securing job opportunities for millions of our young people who are jobless. Many who are well educated and tech savvy will access online jobs. Allow me to inform the great people of Kikuyu that in the next few weeks, the ICT Hub at Thogoto Chief’s Camp, where a former chief’s boardroom was fabricated into an ICT Hub, will be opened. Kikuyu Town ICT Hub will be opened. Kinoo ICT Hub will be opened. At the Nachu TVET, the computers are already on the ground. I encourage other Members to follow suit. I want to lead by example. That is why I am speaking to those ICT hubs. I appreciate that millions of our young people are jobless. They can access jobs not just through the housing fund levy that we have set up to build houses, but we can also create online jobs where people can work from their homes. With those very many remarks, allow me to support this Appropriations Bill and urge the House to support it. Hopefully, at the conclusion of this debate, as we get to the Finance Bill, we shall all rise to the occasion. What we have appropriated in this Appropriation Bill is what we shall be financing in the Finance Bill. I do hope even the myriad of amendments that I see in the Order Paper will be towards the goal of helping the Government realise higher revenues, so that we also do not get deeper into the pit of borrowing.

Hon. Members allow me to invite the Mover to reply if that is the mood of the House.

Thank you very much, Hon. Speaker. I wish to thank every participant of the entire process since we started. This process did not just start on the Estimates. We started the process of making the Budget for 2023/2024 last year. We have held public participations, we have held sector working groups and I thank every participant who has taken part. Just to recap in a minute and put the record straight because I see a lot of figures flying around, the Budget that we appropriated money to and which we are debating in this Bill is a Budget of Ksh3.679 trillion. Out of that money, the monies that we have allocated in terms of deficit or we have allocated to spend which we intend to borrow is Ksh718 billion. This is a climb-down from the last financial year when we had a deficit of Ksh860 billion in 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.

the books. Upon assuming the positions that we are in now, and after perusal of Government books, we realised that Ksh200 billion had been spent under the Financial Year 2022/2023 and, therefore, the entire deficit was Ksh1.1 trillion.

It is important to highlight that on the revenue side, we anticipate collecting Ksh2.57 trillion. In terms of ordinary revenue, we anticipate receiving Ksh42 billion in terms of grants. On the other side of expenditure, and I am just setting the record straight because it is our responsibility, around Ksh986 billion is going to the Consolidated Fund Services (CFS). We are very categorical about allocating enough resources to offset loans, so that we do not continue digging a hole in terms of borrowing, but we cover the hole by allocating as much money as possible towards the repayment of debts. That is why we allocated Ksh986 billion to the CFS kitty.

Hon. Speaker, we have also increased allocations to our counties. We enhanced the equitable share from Ksh370 billion to Ksh385 billion. I know that there have been issues with the Exchequer, but this has mostly been because of jittery markets, especially foreign markets, where we have not been able to realise the money that we anticipated to borrow for the last financial year. Therefore, we had to resort to domestic markets where we were paying a premium in terms of interest rates. So, issues in terms of the Exchequer need interventions and not policies, and we have been doing that.

Hon. Speaker, as I wind up, just to set the record straight, we allocated Ksh2.3 billion to the national Government. Of that amount, 27.4 per cent was allocated to education. We have doubled the allocation to the HELB, and increased the capitation for junior secondary schools by Ksh10 billion. Something else I want to highlight as I conclude is that there are Members who have constructed Medical Training Colleges (MTCs) through the NG-CDF. Among them, 21 are not functional and we have allocated Ksh1 billion to hire additional lecturers and staff for those institutions. We have also allocated money to operationalise all the 21 MTCs.

There are 181 markets that were started by former President Mwai Kibaki through the Economic Stimulus Programme (ESP), and we have allocated Ksh3 billion to all of them, so that Kenyans can start to realise the utility of those markets. Again…

On a point of order, Hon. Speaker.

Yes, Junet. Order, Ndindi. What is your point of order, Junet?

Hon. Speaker, I wanted to bring to the attention of the Chairperson of the Budget and Appropriations Committee that appropriating funds is one thing, but having real money is another thing. He is selling a rosy, heavenly affair saying that we have given Ksh1 billion to this man and Ksh2 billion to that lady. But what is the level of absorption? Will this money come to the…

He is an optimist while you are a pessimist. That is the difference between the two of you.

Hon. Speaker, in answering Hon. Junet, if you realised when I started moving this Bill, I took the first few minutes to talk about Supplementary Estimates II. That was deliberate to show that there are only marginal changes that we are making to the Budget that we are exiting. We also anticipate having almost no changes in the 2023/2024 Budget because we have been very modest and realistic in the projection of revenues.

As I conclude, it is good to also highlight that we allocated Ksh5 billion to fertiliser subsidies. I want to assure our farmers that, as we go to the next season, they will be buying fertilisers at a cheaper price than they did last season because we have allocated enough money for subsidies. 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.

There are many other good things that we have allocated in this Budget. We have allocated Ksh250 billion to roads. An unprecedented amount of funds will be going to power, especially rural electrification.

As we move forward, we will be seeking to enlarge our revenue bracket by necessitating ministries, departments, and agencies (MDAs) that can collect Appropriations-in-Aid (A-in- A) to optimise. We are already doing that through allocations and policies. I wish to thank all Members who have taken part and I beg to reply. Thank you very much.

Next Order.

On a point of order, Hon. Speaker.

Yes, Hon. Mbadi. What is the issue?

Thank you, Hon. Speaker. I realised that the next Order on the Order Paper is the Committee of the whole House on the Finance Bill.

We have not reached there yet. Just hold on.

Hon. Speaker, I was raising this because I know that once you call for the Committee of the whole House, the House is supposed to adjourn. I wanted to raise this point so that I get your ruling on this matter, so that when we move to the Committee of the whole House, the matters would have been dispensed with. Hon. Speaker, if you allow me.

Alright.

Hon. Speaker, this House has set traditions before where the Speaker has ruled that matters of constitutionality, legality, and procedure can be raised at any time in the course of debating a Bill. Article 259 speaks to the interpretation of the Constitution. It should be done in a manner that would promote its purposes, values, principles, advance the rule of law, and contribute to good governance. Our Standing Orders are a creation of our Constitution.

Order, Hon. Mbadi. Take your seat. The matter you are raising was raised by the distinguished Member for Rarieda on Thursday. I promised to give a response and I have a ruling which I want to deliver. So, you are flogging a dead horse. It is a matter that is already in the Hansard and Hon. Otiende Amollo prosecuted it very well. I can see that you are headed in the same direction and so, I will stop you there. Allow me to move on and give my response to what Hon. Otiende Amollo raised. Order, Hon. Members. First, I bring to your attention the availability of a Supplementary Order Paper that should be circulated. I am told that the reason for the Supplementary Order Paper is that we have Members’ amendments to the Finance Bill, some of which were received after the deadline, but were accommodated. This is because we wanted to accommodate as many of you as we could. So, you can look at the Supplementary Order Paper. We will proceed based on that. I have a ruling and Communication to make. Thereafter, the Leader of the Majority Party will move a Procedural Motion to extend your sitting time. Given the enormity and interest in the matter of the Finance Bill, the House Business Committee today directed that, where possible, today you will sit up to the end of the day. Tomorrow morning, we will put aside---

That should come first. 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.

It is out of order to speak to the Chair, when the Chair is making a Communication. We will then, tomorrow morning, if we would not have finished the Finance Bill, put aside your Private Member’s business to deal with it. If you would not have finished by the afternoon, again, we will have a procedural motion for you to sit up to the end of the day. At the end of the day means midnight. That is when the day ends. If you do not finish, then you have Thursday. The House Business Committee has directed that if there is need, a procedural motion will be moved for you to sit on Thursday morning up to 1.00 O’clock and in the afternoon, if possible, up to the end of the day. Should you not finish, then I will give you further directions.

Hon. Members, you will recall that during the Afternoon Sitting of Thursday, 15th June 2023, before the Budget presentation by the Cabinet Secretary for the National Treasury, Hon. Otiende Amollo, Senior Counsel, MP., rose on a point of order and sought procedural guidance on adherence to Standing Order 244(C), with regard to the introduction, consideration and passage of Finance Bill 2023 by the House.

It was the contention of the Hon. Member that Standing Order 244(C) outlines a particular order requiring the Cabinet Secretary for the National Treasury to make a pronouncement of the budget policy highlights and revenue raising measures for the national Government and thereafter, present a legislative proposal which is published and introduced as a Finance Bill. According to the Member, a strict reading of Standing Order 244(C) would, therefore, indicate that the House had jumped the gun by concluding the Second Reading of the Finance Bill before the appearance of the Cabinet Secretary for the National Treasury.

Members at the Bar, take the nearest seat.

Hon. Members, at the time I did indicate to Hon. Otiende Amollo that Standing Order 244(C) had been rendered nugatory by a court decision, and offered to share the relevant judgement after the Sitting.

Hon. Members, following the Budget presentation by the Cabinet Secretary for the National Treasury and Economic Planning, I received inquiries and representations from several Members of the House relating to the matter raised by the Hon. Member for Rarieda. Given the turn of events, I have decided to issue this particular guidance to the House. Hon. Members, from the inquiries and presentations received, I have isolated two issues in relation to the consideration of the Finance Bill that require clarification. These are: (i) The effect of the court judgement alluded to in my response to Hon. Otiende Amollo to the manner of considering and passing of a Finance Bill. (ii) The procedure applicable to the consideration of Finance Bill in light of the provisions of Section 39A and 40 of the Public Finance Management Act, 2012, and Standing Order 244(C), and the effect of the presentation of the Budget Statement on the consideration of a Finance Bill. 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.

With regard to the first issue, the Court judgement that I alluded to relates to a matter filed by the Hon. Senator Okiya Omtatah challenging the constitutionality of the provisional Collection of Taxes and Duties Act. As per the practice obtaining in 2018, the Cabinet Secretary for the National Treasury would submit a Finance Bill after the passage of the Budget Estimates and, on the same day, that he/she made a Budget Speech in Parliament.

Pursuant to the then Standing Order 245, the House was required to pass a Finance Bill within 90 days of the passage of an Appropriation Bill. In the interim, the House would consider and pass a Motion operationalising all the revenue-raising in measures proposed in a Finance Bill for the period between its publication and its passage in line with the Provisional Collection of Taxes and Duties Act, 1959. A point of order raised by the Member for Ruaraka, the Hon. Tom Joseph Kajwang’ MP, during the Afternoon Sitting of the House on 5th July 2018 may have precipitated the matter filed by Hon. Sen. Omtatah. At the time, Hon. Kajwang’ queried the propriety of operationalising all the revenue-raising measures proposed in a Finance Bill in line with the Provisional Collection of Taxes and Duties Act, 1959. In light of the provisions of the Constitution and the Public Finance Management Act, 2012, the Hansard records that several current Members of the House ventilated on the point raised by Hon. Kajwang’ then, including the Leader of the Majority Party, Hon. Kimani Ichung’wah MGH, MP, Hon. John Mbadi and Hon. Makali Mulu, MP. The High Court issued its judgement in Okiya Omtatah Okoiti versus Cabinet Secretary National Treasury and three others 2018 Kenya Law Reports (KLR) on 19th September 2018 and gave the following orders, and I quote: (a) A declaration by presenting the Finance Bill 2018 to the National Assembly on 14th June 2018, while the financial calendar ends on 30th June 2018, the Cabinet Secretary violated Section 37 of the Public Finance Management Act, 2018, which sets the 30th April deadline for the Cabinet Secretary to table the Budget Estimates and any other Bills required to implement the National Government Budget for approval by the National Assembly.

Order, Hon. Member for Kisii County and your colleague. You are distracting the Chair from delivering the ruling. (b) A declaration that the Provisional Collection of Taxes and Duties Act No.44 of 1959 (Chapter 415 of the Laws of Kenya) is unconstitutional and, therefore, invalid, null and void. (c) A declaration that the Finance Bill 2018 or any parts or provisions thereof including on taxation cannot be implemented before the Bill becomes the Finance Act and it goes through the parliamentary legislative process laid out in the Constitution for approval and adoption by Parliament and assent by the President.

Arising from these orders of the court and ostensibly informed by the debate that ensued on the point raised on the propriety of approving provisional collection of taxes and duties, the House subsequently amended the Public Finance Management Act in July 2019 through Statute Law (Miscellaneous Amendment) Act 2019 to introduce Section 39(A) in the Act. The Section requires the Cabinet Secretary to submit the Finance Bill before 30th April every year, and that it be passed before the end of financial year on 30th June. The Section clarified the manner in which a Finance Bill ought to be introduced, considered and passed by the House. It provides as follows, and I quote: 1. The Cabinet Secretary shall submit to the National Assembly on/before 30th April the Finance Bill setting out the revenue raising measures for the national Government. 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.

2. Following the submission of the Finance Bill by the Cabinet Secretary, the relevant Committee of the National Assembly shall introduce the Bill in the National Assembly. 3. The National Assembly shall consider and pass the Finance Bill with or without amendments in time for it to be presented for assent by 30th June each year. 4. Any recommendations made by the relevant Committee of the National Assembly or resolution passed by the National Assembly on revenue matters shall: (a) ensure that the total amount of revenue raised is consistent with the approved fiscal framework; (b) take into account the principles of equity, certainty and ease of collection; (c) consider the impact of the proposed changes on the composition of the tax revenue with reference to direct and indirect taxes; (d) consider domestic, regional and international tax trends; (e) consider the impact on development, investment, employment and economic growth; (f) take into account the recommendations of the Cabinet Secretary as provided under Article 114 of the Constitution; and, (g) take into account the taxation and other tariff arrangements and obligations that Kenya has ratified, including taxation and tariff arrangements under the East African Community Treaty. This leads us to the second issue of an apparent variance in the provisions of Standing Order 244(c) and the dictates of the judgement and the provisions of the Public Finance Management Act, 2012.

Hon. Members, as I had indicated, my attention was drawn to the existence of an apparent variance in the provisions of Section 39A and Section 40 of the Public Finance Management Act, 2012 with regard to the manner of introduction and consideration of a Finance Bill. Section 40 of the Act provides as followings: 1. Each financial year, with the approval of Cabinet, the Cabinet Secretary shall make a public pronouncement of budget policy highlights and revenue- raising measures for the national Government. 2. In making the pronouncement under Section 1, the Cabinet Secretary shall take into account any regional or international agreements that Kenya has ratified, including the East African Community Treaty and where such arrangements or agreements prescribe the date when the budget policy highlights and revenue-raising measures are to be pronounced, the Cabinet Secretary shall ensure that the measures are pronounced on the appointed date. 3. On the same date that the budget policy highlights and revenue-raising measures are pronounced, the Cabinet Secretary shall submit to Parliament a legislative proposal setting out the revenue raising measures for the national Government together with a policy statement expounding on those measures. 4. Following the submission of the legislative proposal of the Cabinet Secretary, the relevant Committee of the National Assembly shall introduce a Finance Bill in the National Assembly. 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.

5. Any of the recommendations made by the relevant Committee of the National Assembly or adopted by the National Assembly on revenue matters shall: (a) Ensure that the total amount of revenue raised is consistent with the approved fiscal framework and the Division of Revenue Act; (b) Take into account principles of equity, certainty and ease of collection; (c) Consider the impact of proposed changes on composition of the tax revenue with reference to direct and indirect taxes; (d) Consider domestic, regional and international tax trends; (e) Consider the impact on development, investment, employment and domestic growth; (f) Take into account the recommendations of the Cabinet Secretary as provided under Article 114 of the Constitution; and, (g) Take into account the taxation and other tariff agreements and obligations that Kenya has ratified, including taxation and tariff agreements under the East African Community Treaty. 6. The recommendations of the Cabinet Secretary in Sub-section (5)(f) shall be included in the Report and tabled in the National Assembly. A plain reading of Section 40(3) and Section 40(4) of the Act indicates the Cabinet Secretary for the National Treasury and Economic Planning is required to submit a legislative proposal setting out the revenue-raising measures for the national Government on the same day that he or she makes a pronouncement of the budget policy highlights and revenue-raising measures. This would seem to be at variance with the express obligation under the more recent Section 39A, which requires the Cabinet Secretary to submit a Finance Bill to the House not later than 30th April every year in compliance with the Orders of the Court in Okiya Omtatah Okoiti vs the Cabinet Secretary of the National Treasury and three others.

Take your seats, Hon. Members. Take the nearest seat. Hon. Okuome, take the nearest seat. Well done. That is the nearest you can find? Hon. Members, in my view, a purposive interpretation to bridge the apparent conflict between the two provisions requires the application of established principles of statutory interpretation and reference to the practice, precedent and conduct of the Cabinet Secretary and the House since the court judgement was issued. Hon. Members, it is a canon of statutory interpretation that, when faced with conflicting provisions, preference must be given to a specific provision as opposed to a general provision. Additionally, the last-in-time principle where the most recent addition to a statute is given precedence over a provision that was enacted earlier should be applied. From my reading of Section 39A, Section 40(3) and Section 40(4), it is noteworthy that Section 39A specifically refers to the introduction, consideration and passage of a Finance Bill. On the other hand, the provisions of Sections 40(3) and Section 40(4) generally refer to a legislative proposal. Additionally, Section 39A is the most recent addition to the Act. It represents the most specific and current position of the House on the manner of consideration of a Finance Bill. Hon. Members, the practice and conduct of the Cabinet Secretary and the House since the decision in the Okiya Omtatah Okoiti vs the Cabinet Secretary of National Treasury and three others, in the [2018] KLR, and the amendment of the Public Finance Management Act of 2012 has been consistent. Notably, in 2020, the Cabinet Secretary submitted the Finance 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.

Bill together with the Budget Estimates on 30th April 2020. The Bill was published on 5th May 2020 and was considered and passed by the House on 23rd June 2020. It was assented to by the President on 30th June 2020. The Cabinet Secretary presented the Budget Statement for the 2020/2021 Financial Year on 11th June 2020. That was well after the publication of the Bill. In 2021, the Cabinet Secretary submitted the Finance Bill together with the Budget Estimates on 29th April 2021. The Bill was published on 5th May 2021. It was considered and passed by the House on 24th June 2021. The particular Bill was assented to by the President on 29th June 2021. The Cabinet Secretary presented the Budget Statement for the 2021/2022 Financial Year on 10th June 2021, well after the publication of the Bill. In 2022, on account of the general elections scheduled for August 2022, the Cabinet Secretary submitted the Finance Bill together with the Budget Estimates on 7th April 2022. This was on the same date that he presented the Budget Statement to the House. The Bill was published on 8th April 2022 and was considered and passed by the House on 7th June 2022. In keeping with the provisions of Section 39A of the Public Finance Management Act of 2012 and the new court judgement, the Finance Bill of 2022 was assented to by the President on 21st June 2022. Hon. Members, from the foregoing, it is clearly apparent that the Cabinet Secretary and the House have adhered to the letter of the Orders of the Court in Okiya Omtatah Okoiti vs Cabinet Secretary, National Treasury and three others, in the [2018] KLR, and Section 39A of the Public Finance Management Act, 2012. This clearly signifies that Section 39A of the Public Finance Act of 2012 is the operative provision with regard to the introduction, consideration and passage of a Finance Bill. The third issue was with regard to the effect of the presentation of the Budget Statement on the consideration of a Finance Bill. Section 40 of the Public Finance Management Act of 2012 requires the Cabinet Secretary to make a public pronouncement of the budget policy highlights and revenue-raising measures of the national Government. In doing so, the Cabinet Secretary is required to take into account international obligations entered into under the East African Community Treaty. The House is aware that the EAC partner States have agreed to present and table their Budget Statements to their respective Parliaments every second Thursday of June. It is largely a ceremonial exercise which, particularly in our case, does not take away that all documentation relating to the budget is required to be submitted well in advance of the presentation of the Budget Statement. Indeed, as Members are aware, no question or comment is permitted during the presentation of the Statement. As a budget-making House, we are seized of the Estimates and the Finance Bill latest the 30th of April every year. Save for compliance with applicable statutory timelines, the House is left to its own devices on how to consider the Budget documents submitted to it. The House is under an obligation to prioritise the consideration of a Finance Bill with a view of passing it before the lapse of the June 30th deadline imposed by Section 39A of the Public Finance Management Act, 2012. It should not be lost to Hon. Members that the procedures of the House cannot be left to the whim of another arm of Government. The House is, therefore, at liberty to prioritise consideration of a Finance Bill before or after the presentation of the Budget Statement by the Cabinet Secretary for the National Treasury. As I conclude, I note that the variance in the Sections 39A and 40(3) and (4) of the Public Finance Management Act extends Standing Order 244C which gave rise to the point raised by the Member for Rarieda, Hon. Otiende Amollo, EBS, SC, MP. The Standing Order does not take into account provisions of Section 39A and the requirement for the submission and passage of the Finance Bill before the 30th of April and the 30th of June, respectively, every 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.

year.

Hon. Members, having guided that Section 39A is the operative provision with regard to the consideration of a Finance Bill, I direct the Procedure and House Rules Committee to note the variance and include the Standing Order in the items earmarked for review when it next proposes amendments to the Standing Orders. In summary, therefore, my guidance is as follows— 1. THAT, Section 39A of the Public Finance Act, 2012 requires the Cabinet Secretary for the National Treasury to submit the Finance Bill before 30th April every year and that, the Bill be passed before the end of the financial year on 30th June. The section governs the manner in which a Finance Bill ought to be introduced, considered and passed by the House. 2. THAT, it is a canon of statutory interpretation that when faced with conflicting provisions, preference must be given to a specific provision as opposed to a general provision. Additionally, the last-in-time principle where the most recent addition to a statute is given precedence over a provision that was enacted earlier should be applied. Section 39A of the Public Finance Management Act, 2012 specifically refers to the introduction, consideration and passage of a Finance Bill and represents the most specific and current position of the House on the manner of consideration of a Finance Bill. 3. THAT, the Cabinet Secretary and the House have consistently adhered to the Orders of the Court in Okiya Omtatah Okoiti verses Cabinet Secretary,National Treasury & three others [2018] KL,R and Section 39A of the Public Finance Management Act, 2012. This clearly signifies that Section 39A of the Public Finance Act, 2012 is the operative provision with regard to the introduction, consideration and passage of a Finance Bill. 4. THAT, the House is under an obligation to prioritise the consideration of a Finance Bill with a view of passing it before the lapse of the June 30th deadline imposed by Section 39A of the Public Finance Management Act, 2012. The House is, therefore, at liberty to prioritise consideration of a Finance Bill before or after the presentation of a Budget Statement by the Cabinet Secretary for the National Treasury. 5. THAT, the Procedure and House Rules Committee notes the variance between Standing Order 244C and Section 39A of the Public Finance Management Act and include the Standing Order in the items earmarked for review when it next proposes amendments to the Standing Orders. The House is accordingly guided. Allow me to thank the Hon. (Dr) Otiende Amollo for raising the issue and for allowing me to give clarity on the matter going forward. Ordinarily, we do not debate or comment on the ruling and the direction of the Chair. We will let it lie there.

Hon. (Dr) Otiende Amollo, let the chips fall where they may. You may proceed.

Thank you, Hon. Speaker. At the same time, I want to let the Leader of the Majority Party to know… When we raised this matter, he threw words, as he always does, alleging that I was part of the case that you have alluded to. I wanted him to know that I was not part of the case and I was not aware of it. Secondly, I take your guidance. I think the House Business Committee and the Procedure and House Rules Committee should take your guidance very seriously. We have now amended our Standing Orders twice since that decision of the court - on 6th June 2020 and 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.

7th June 2022. This should have been factored in. The Speaker is always right and, therefore, I urge the House Rules Committee to consider your guidance. Although your decision says that the matter must be published and introduced. It does not say that it must be debated before the Budget. I want to suggest that it would be in order to have the Budget and then the contents of it and then debated in the Finance Bill. That is not to bring the Second Reading before the Budget, so that the Budget is heard, we have the Second Reading which is the debate and then we move logically. Lastly, I have a point of order on the next business, which is Order No.13.

Order, Hon. (Dr) Otiende. You are certainly taking unhelpful shortcuts.

Order, Hon. Mbadi. This matter was raised by Hon. (Dr) Otiende. I have bent backwards by allowing him to make a comment. I have thanked him for raising a matter that goes to align the Act with our Standing Orders in the next review. You will present your views to the Committee when the time comes. Hon. Members, before we go to the Committee of the Whole House, I want to invite the Leader of the Majority Party to move a Procedural Motion on the Sitting time. Afterwards, I will give you some guidance on how to proceed in the Committee of the whole House before we go to the Committee.

Leader of the Majority Party you may proceed.

Hon. Speaker, with your indulgence, when you gave Hon. (Dr) Otiende Amollo the right of reply, he mentioned my name. Whatever I said off-record was not in bad faith. Severally, I have heard you refer to Hon. (Dr) Otiende Amollo as Senior Counsel. I expected that, as a Senior Counsel, he would be privy to matters in the courts. Ordinarily, a senior counsel would know issues in court, especially weighty matters like Petition 253 of 2018 by Hon. Okiya Omtatah. Hon. Speaker, I beg to move: THAT, pursuant to the provisions of Standing Order 30(3)(a), this House orders that, should the time appointed for adjournment of the House today, Tuesday 20th June 2023, be reached before conclusion of the business appearing under Order No.14 of today’s Order Paper, being the Committee of the Whole House on the Finance Bill, 2023, the Sitting of the House shall stand extended until the conclusion of the said debate. Hon. Speaker, I do not need to say much about this because, as you alluded, we discussed it in the House Business Committee. The House Business Committee directed that we have this Procedural Motion for today, tomorrow and Thursday, as you have rightly communicated earlier. I beg to move.

Who is seconding you?

I ask Hon. Junet Mohamed to second.

Hon. Speaker, I stand to second.

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.

As you directed, we discussed this in the House Business Committee. There is a lot of business before us, but Kenyans must know that Members of Parliament are working. There are no people who sit till midnight working other than Members of Parliament.

Many times, Members of Parliament are bashed that they earn a lot of allowances for nothing. These are the only people who sit up to midnight to carry out the business of this country without any allowances. That is because we want to serve our country. I would like to beseech Members to stay put. I am told that there is a lot of food and drinks at the cafeteria. Those who have pending business after this House can suspend them for today to enable us to conclude this business properly so that Kenyans can have some money in their pockets, which I doubt.

Do you want to contribute on this?

Is it the mood of the House that we put the question?

Yes.

You can respond without drama.

Hon Members, before we get to the Committee of the Whole House, allow me to give guidance on the consideration of proposed amendments to the Finance Bill (National Assembly Bill No.14 of 2023).

Hon. Speaker, I rise under Standing Order 131 but before I go there, I want to say that just as I mentioned earlier today in the HBC, our understanding of the provisions of Article 114(2) is that the House does not require the concurrence of the Cabinet Secretary but simply take into consideration the views of the Cabinet Secretary. It can either accept or reject them. For that purpose, I am of the view that we can still prosecute all the proposed Amendments.

I want to go to the second issue if Members could give me attention.

Order, Hon. Members. You will listen to the Leader of the Minority Party in silence.

Hon. Speaker, Standing Order 131 and I want to read it for the avoidance of doubt, this notion that we are in a hurry should also be dispensed with because I do not think we are. We have all the time to deal with the issues. Standing Order 131 provides that: Where after a Bill has been read a Second Time and before commencement of Committee of the whole House, Amendments have 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.

been proposed to it, which in the opinion of the Speaker require harmonisation, the Speaker may direct any Member proposing an Amendment to the Bill to appear before the relevant Departmental Committee dealing with the subject matter of the Bill to present his or her proposed Amendments and the Committee shall submit a report to the House on the result of the exercise before the Committee of the whole House is taken. Hon. Speaker, from the Standing Order 131, you will notice that the Amendments that have been proposed go to the core of the Bill and some have got far reaching ramifications. I just want to plead with you because we have not been told if at all a window was provided to the Departmental Committee on Finance and National Planning, chaired ably by Hon. Kimani Kuria to undertake this harmonisation process. In fact, in parliamentary parlance, it is referred to as winnowing. That would then make the work of the whole House easier. There is much more to it because in the past, previous Speakers and in particular, JB Muturi ruled, when faced with similar situations, where there had been a raft on very many Amendment proposals to a Bill, that the way the winnowing exercise undertaken before the Committee of the whole House can commence. But, he even went further; Article 118 of the Constitution which imposes a duty on this House without reading it and a duty on this House to undertake proper public participation on any Bill before it can be dispensed with or processed… The upshot of this, is buttressed by Standing Order 127(3) which says: The Departmental Committee to which a Bill is committed shall facilitate public participation on the Bill through an appropriate mechanism, including – (a) Inviting submission of memoranda (b) Holding public hearings (c) Consulting relevant stakeholders in a sector (d) Consulting experts on technical subjects. Going by the number of Amendments being proposed, firstly, by the Departmental Committee on Finance and National Planning and, secondly, by various other Members and Chairpersons of other Committees, it would appear that the character of this Bill is likely to change in a comprehensive manner and we are likely to transact business on matters which the public have not been given an opportunity to make their contribution. In other words, on a matter which the public has not participated. I want to give two examples of Bills which had not only been referred back to the Committee for harmonisation, winnowing but were ordered to be republished by the then Speaker, Hon. JB Muturi: Gaming Bill, No.35 of 2019 and Universities (Amendment) Bill of 2021. In those two instances, in respect of those two Bills, Speaker Muturi having assessed the enormity of the proposed Amendments and the likelihood of them changing fundamentally the character of the original Bill and bearing in mind the requirements and the dictates of Article 118 of the Constitution on public participation buttressed by Standing Order 127(3), directed that the Bills not only be harmonised but also be republished.

Hon. Speaker, in the same vein, I want to plead with you because 30th June is still too far away. The House can find a mechanism of navigating through this process. We cannot circumvent a very cardinal process or principle on public participation in Article 118 of the Constitution of Kenya, 2010, by simply rushing through this process. It is my submission that this Bill requires not only a harmonisation process but also requires to be re-published so that the public can be given adequate time and opportunity to participate.

Hon. Speaker, I submit. Thank you.

Leader of the Majority Party. 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.

Thank you, Hon. Speaker. Let me thank the Leader of Minority Party for raising those issues. A number of them are not accurate. I have been with him in this House for almost 11 to 12 years. We joined this House together. He has alluded to previous rulings by Speaker JB Muturi and the precedent he set. He knows for a fact there is no single moment that Speaker Muturi or any other Speaker in the history of this House allowed the process of winnowing which is alluded to under the Standing Order on Money Bills. That is a fact. The Leader of the Minority Party knows it. Winnowing is done in other Bills, except Money Bills, that are not subject to Article 114 of the Constitution. That is why I have said that what the Leader of the Majority Party said was not accurate. If this was not a Money Bill, a winnowing process would help the House to process the myriad of amendments that are similar in a faster way. With all due respect, the Leader of the Minority Party knows that it has never happened in Money Bills in the history of this House. They are subject to the provisions of Article 114 of the Constitution. This is neither the first nor the last Finance Bill we, as a House, are processing. It is neither the first time nor the last time we will see filibustering.

The Leader of the Minority Party has said that we do not need the concurrence of the National Treasury. To an extent, I agree with him. We are not under the direction of the National Treasury at all. However, I want to confirm that in line with the provisions of Article 114 of the Constitution, the Chair of the Departmental Committee on Finance and National Planning engaged them. Even after the HBC meeting this morning, I was in a meeting with the Chair of the Departmental Committee on Finance and National Planning Committee and a whole delegation from the National Treasury to consider all the amendments that have been proposed by the Committee. There are some amendments that had been proposed by the Committee which were withdrawn after consultation with the National Treasury. If you go through the Supplementary Order Paper, you will see the amendments by the Member for Homa Bay Town, Hon. Kaluma, that were allowed to be moved after that consultation. The amendments by Hon. Oundo, Hon. Naisula who is seated right at the back, Hon. Mbui, Hon. Oluoch and Hon. Mule were allowed to be moved. There are myriad of amendments that were allowed to be moved after that consultation. That is why I said it was not very accurate to say that there were those that were condemned unheard. Hon. Speaker, there is a question on public participation. In the history of legislative processes in this country since the enactment of the new Constitution, no other Bill—even the infamous Political Parties Bill which we took through winnowing— had a more rigorous public participation exercise than this Finance Bill. I must commend the Chair and Members of the Departmental Committee on Finance and National Planning from both sides of the political divide. I know there are diligent Members of this Committee in Azimio la Umoja-One Kenya Coalition who sat through the public participation. There are also many Members within the Kenya Kwanza Coalition who sat for long hours through public participation. For the first time, I have seen Members of Parliament, as Hon. Junet said, not only sitting up to midnight but also on Sundays. At one point, may the Lord forgive me, I was watching a public participation exercise, when I was seated in church somewhere. These Members of the Departmental Committee on Finance and National Planning devoted a lot of their time to this public participation. Therefore, the question on public participation is something that has been covered. Hon. Speaker, there are other amendments. I will draw reference to some amendments I have seen here by Hon. Makali Mulu. Some seek to delete particular clauses. Other than being subjected to the provisions of Article 114 of the Constitution, if you are seeking to delete a provision in a Bill, the easiest way is to vote against it in the Bill. Therefore, you have been accorded the opportunity, since the provision is still in the particular clause. For instance, there are those that Hon. Makali Mulu seeks to delete. When we go to the Committee of the whole 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.

House, he will get an opportunity to prosecute his case as to why he seeks deletion and convince me and others. If we agree with him, we will vote negatively and basically defeat that particular provision and it will not be there. In conclusion, the process of winnowing in the history of this House is a fact that is known by those who have been here. It has never been subjected to Money Bills, unless we are trying to reinvent that. I want to beg that as much as we are not in a hurry as the Leader of Minority Party said, we have up to midnight. We are in no hurry. However, we must also spend the time that we have devoted here up to midnight today, tomorrow, Thursday, and hopefully any other day before 30th June properly. Let us not, in any way, utilise our time through filibustering and in an unwise manner. Hon. Speaker, I beg to submit.

Hon. Junet.

Hon. Speaker, the cardinal responsibility of this House in Article 95 of the Constitution is to legislate. We must stop anything that impedes that in this House. The Members here have amendments to the Finance Bill. However, they have been told that under Article 114 of the Constitution, they must consult with the National Treasury. This is supposed to happen between the Committee and the National Treasury but not necessarily with the Members. This impedes Members from doing their legislative work. I remember in 2018 in this House and it is on record in the Hansard, I brought an amendment to the Finance Bill which was a Money Bill. We were amending a clause that was putting 16 per cent Value Added Tax (VAT) on fuel which is the same thing we are doing today. At the beginning, I was told that it was supposed to be under Article 114 of the Constitution. The Speaker then was seated on the chair you are seated on today and he made a ruling in the afternoon. He said that the matter should be decided by the Members themselves through voting. In the end, we agreed to come up from zero to 8 per cent. The Executive came from 16 per cent to 8 per cent. That is why we have 8 per cent of VAT on fuel today. The Executive came for 16 per cent but we agreed on 8 per cent. That is why today, we have 8 per cent VAT on fuel. There was no memorandum, we agreed and the Speaker ruled he is exempting that amendment from Article 114 of the Constitution. Why? This is because Article 114 of the Constitution states, ‘in the opinion of the Speaker’. The Speaker has a serious opinion because he is the one who runs this House, is in-charge of legislation, approves amendments and looks at the constitutionality of matters brought. Hon. Speaker, do not lose what the Constitution has given you, when it states, ‘in the opinion of the Speaker’. It does not state in the opinion of the Cabinet Secretary or Principal Secretary of the National Treasury and Economic Planning. Hon. Speaker, in your opinion, if an amendment is of national interest or importance, I beseech you to allow it. The amendment will be voted and Members will make a decision one way or another. In conclusion, let me pick what Hon. Makali proposed in terms of deletion. I do not think voting against an amendment is the same as proposing an amendment for deletion. These are two different things and are not similar according to my understanding. Deletion means getting rid in totality; completely out of the Bill. No, means it can go either way and that is why we vote on the amendment for deletion. Deletion of clauses has been a tradition of this House. Previously, our Clerk was the Director of Legislative and Procedural Services. He has been approving deletions for the last 10 or 15 years I have been here. Delete this and that. So why is deletion an issue today? If you do not like it, vote against it like we are saying we vote against an amendment. Hon. Speaker, under Article 195, let us have freedom of debate and legislation. Let everybody bring any amendment they want; it be put to vote and whichever side carries, we agree and move forward. Let us not hide ourselves under Article 114 of the Constitution because it is so ambiguous. It is like the one the Executive uses to gag Parliament, when we 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.

pass Bills for assent and they are returned with a memorandum. Then, we are told in order to undo, we must get two-thirds. Article 115 of the Constitution is another one that has been abused for the last 10 years.

On a point of order, Hon. Speaker.

Order Junet, there is a point of order from Hon. Chepkonga.

Thank you Hon. Speaker. Hon. Junet Mohamed is repeating himself over and over and does not need to convince anybody. He is just filibustering and needs to be relevant. He looks at the Leader of the Majority Party and repeats the same thing he has said 30 seconds ago. You should rule him out of order. There is a Standing Order which is very clear on repetition. He does not need to convince us too much because we know where he stands. He should speak for one minute, sit down and we will deal with the rest.

Finish Junet.

Hon. Chepkonga is my friend but for his five years absence from Parliament, something needs to be done. Let me leave it there.

Hon. Speaker, in conclusion, in your own wisdom and opinion, I beseech we allow the amendments brought by Members so we can proceed to vote and see how they go. Thank you very much.

Murugara.

Just take your seat for a minute, I will give you. Hon. Murugara a chance.

Thank you very much, Hon. Speaker. As we proceed, we must distinguish between Money Bills and Ordinary Bills and there is a clear distinction in our Constitution as to what they are. Our Standing Orders are very clear on winnowing and this is a House of records. We have precedence on where winnowing and harmonisation has been allowed by the Speaker. We do not have precedence where winnowing has been called for and the Speaker disallowed it to take place. The reason being Money Bills are special forms of Bills which are contemplated during the budget making process. This is why this House is appropriating money so that the Government has revenue for use. Looking at Article 114(2) of Constitution, it states: “(2) If, in the opinion of the Speaker of the National Assembly, a motion makes provision for a matter mentioned in the definition of “a Money Bill”, the Assembly may proceed only in accordance with the recommendation of the Committee of the Assembly after taking into account the views of the Cabinet Secretary responsible for finance.” Surely, this is not far-fetched when we seek views of the Cabinet Secretary for National Finance and Economic Planning since it is part of our law. Most importantly, I sat in the last Parliament and we winnowed the Political Parties (Amendment) Laws and the Security Laws which was in order but we have never done it in a Finance Bill. I want to speak on deletions. In the Finance Bill they are equivalent to successfully opposing a section of that Act. Once you oppose successfully, that section is deleted in entirety. This is why we are saying, there is no point in having these deletions in the Order Paper. We simply take it to vote, and if it carries the day, the deletion succeeds. If it fails, that section remains. Therefore, we should proceed without these deletions and most importantly, the winnowing bit is not relevant to what we have before the House today. Thank you, Hon. Speaker. 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.

Makali Mulu.

Thank you very much, Hon. Speaker. I want to go on record that I have been a Member of the Budget and Appropriations Committee for the last 11 years since I joined Parliament. One of the key responsibilities of the Parliamentary Budget Office, is to determine whether Bills are Money Bills or not. Once Bills are determined to be Money Bills, the Budget and Appropriations Committee sits and accords Members a chance to present their Bills and justify why they are important to this country. On this basis, there will be consideration and consultations with the National Treasury to determine whether it should proceed to Second Reading or not. This being a Finance Bill, automatically all amendments relate to Money Bills. Looking at the many amendments proposed by Members, I think what Hon. Junet was saying makes a lot of sense. That, Members proposing amendments need to be accorded an opportunity to be listened to, so that we can make a decision on whether to withdraw an amendment or not. In a situation where they are more than 10 Members and two Departmental Committees proposing amendments, we want to rubbish them because they lead to Article 114. I think we are being unfair to this House which makes laws. Hon. Members, we have 30 days to pass this Bill. I do not think we are late. In my opinion, I would request the Speaker to accord us an opportunity maybe up to midnight as he is saying. We break and this Committee convenes so we go up to midnight, present our issues and see the way forward. The other issue is when I propose to delete a clause. We know this House on matters voting, we lose all our senses. People will just say “yes” when it should be “no”. Others will say “no” when it should be “yes”. On that basis, the only room I have is to delete so I will have an opportunity to prosecute my case and hope to convince on the basis of objectivity and not what we have been told to do. Hon. Speaker, I beg you, if it is possible, you accord Members an opportunity to prosecute their amendments. Thank you, Hon. Speaker.

The Chairman of the Committee. I will bring this to a closure soon.

Thank you, Hon. Speaker. I had the advantage of being a Member of the Departmental Committee on Finance and National Planning for the entire life of the 12th Parliament. Therefore, I have seen the process of the Finance Bill for the last five years. This is the sixth year where I am the Chairman. During the 12th Parliament, I did not agree with the Committee on two occasions. I requested that I move amendments on the Finance Bill and that was captured in the Order Paper. On those two occasions, there was no winnowing that happened for those particular Finance Bills for the five years that I served as a Member of the Departmental Committee on Finance and National Planning. Hon. Makali Mulu brings a very interesting debate about Money Bills and the Budget and Appropriations Committee (BAC). That makes it even a little more complicated on whether those amendments should be sent to the BAC and not to the Departmental Committee on Finance and National Planning. Hon. Speaker, we had a sitting with the Committee and looked at most of the amendments that Hon. Members were bringing. Most of those amendments were carried in our amendments that we are proposing this afternoon. Lastly, I would like Members to really understand that every clause in this particular Bill has a financial implication. Last week, in the Committee of Supply, we passed the appropriations of various categories. Apart from the allocation for private universities, I did not see any amendment proposing to do a cut in any of the budget proposals that was passed by the Chairman of Budget and Appropriations Committee. Therefore, to expect that the Committee would accept amendment of particular clauses without consultation on the financial 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.

implication would be committing a budget suicide; if we can call it that. This is because, we have a responsibility to find resources for projects and votes that this House has agreed on. Unfortunately, that responsibility is being carried out by the Departmental Committee on Finance and National Planning. I urge this House that when we come to debate on the revenue measures to finance the budget that you MPs have already passed, we should not see any of the Members on the other side of this House amending any vote to reduce our expenditures. We should not reduce how we shall finance this budget. We have tried to achieve a deficit of only Ksh718 billion, so for any amendment without consultation on any clause is going to affect our debt.

Hon. Chairman, stick to Article 114.

Hon. Speaker, I have made my point. Thank you very much.

Hon. Members, we need to make progress. I have listened to the issues raised by the Hon. Leader of the Minority Party, the response of the Hon. Leader of the Majority Party, Hon. Junet, Hon. Makali Mulu, Hon. Murugara and Hon. Kimani Kuria. First, the issue of Article 114 should be protected and beheld sacrosanct. However, in the opinion of the Hon. Speaker, this is not in any way precedent setting against Article 114. I have looked at the amendments listed and the clauses in the Bill that have attracted the highest proposals for amendments. They are the following clauses: Clause 2, 24, 33,34,36,43,76 and 78. I will allow proposed amendments for those clauses to proceed regardless.

Order! Those of you who have filed amendments know the clauses you are amending. In my view and in consultation with the Clerks-at-the-Table, it will not be good to lock out the clauses that have attracted the highest proposals for amendment. I want those who have proposed to prosecute them, that is Clauses 2,24,33,34,36,43,76 and 78. I will allow, regardless of my views on Article 114. I will repeat: This is not a precedent setting. It is a unique situation that I will allow the House. In the interest of fairness and arriving at a consensual Bill that takes our country forward, you will be allowed to prosecute your amendment. Hon. Kimani, the Hon. Leader of the Majority Party and the rest, be available to prosecute this in the Committee of the whole House. As we go into the Committee of the whole House, I want to say the following.

On a point of order.

Hon. Junet, what is it?

Hon. Speaker, in accordance with your ruling that has changed the dynamics of our engagements, I am requesting that we adjourn for 10 minutes so that we apprise our Members on those clauses that you have given then we resume again.

Order! Yes, Hon. Ruku.

Thank you, Hon. Speaker. It is true that Clause 71 has ensured that this country has missed royalties from July 2020 up to now. If we are not going to…

Are you speaking to my direction? 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.

Yes, Hon. Speaker. If you are not going to allow this House to also look at the amendment…

No, he has not mentioned Clause 71. I besiege you, Hon. Speaker, to also allow Clause 71 of the Finance Bill to be looked at regardless of whether it is a Money Bill and affecting Article 114 of the Constitution or not. This is because, if it does not get the amendment, this country will continue losing royalties and we are here seeking to see how we can finance the deficit of Ksh719 billion as it was.

Hon. Ruku, you seem to have a mistaken belief that the amendment will go through. It will be put to a vote.

Yes, Hon. Speaker, I beg you to allow and include that clause in the ones you read earlier. Thank you, Hon. Speaker.

If I now start deleting and including, we will not make progress. I have given you a reasoned direction which I believe is sound. Let me now call the House to order.

On a point of order.

Hon. Mbadi, what is procedural? Let it be procedural, please!

Hon. Speaker, I want to thank you for your ruling and indulgence on this matter of allowing Members who had proposed amendments to be considered. As a matter of procedure, from the debate here, it is clear that we need to do something about our Standing Orders and to move amendments. I want to suggest this because tomorrow we might have another Speaker who may not indulge the Members. We need to be clear that if this provision in the Constitution says that National Assembly may proceed only in accordance with the recommendation of the relevant Committee of the Assembly, there should be a Report from the Committee on each and every proposed amendment so that Members proposing amendments are not disadvantaged. It should not be left at the whims of the Clerk or Hon. Speaker. Hon. Speaker, you only have the authority, in your opinion, to determine whether it is a Money Bill but as to whether the House should proceed. That is supposed to come from the Committee in form of a Report. What I expected…

Hon. Mbadi, you are actually pursuing a defeatist argument.

Hon. Speaker, I am just asking that we fine tune our Standing Orders.

You are inviting me to lock out everything!

Order, Hon. Mbadi! You are talking to a Hon. Speaker who is also a very senior lawyer in this country and who understands legal issues very clearly. There is the provision of Article 114 and the public participation bit. There is also your own Standing Orders that limit the time within which to file the amendments. If you want to open that argument and we go back to the status quo ante, then we lock out everybody. I have exercised my discretion and magnanimity to Members who have filed amendments in the largest number. So that we do not lock out Members unnecessarily and unreasonably, those clauses that have attracted the largest number of proposed amendments cannot be for nothing. Let them be dealt with in the Committee of 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.

the whole House. You will argue a case for the amendment of a specific clause, and the Chairperson of the Committee, or any other Member will respond. The Chairperson of the Committee of the whole House will put the Question and the matter will proceed. Two, going forward, because I have already directed that you will sit up to the end of the day today, tomorrow, and Thursday, it is also in your interest to prosecute the matter and finish it within reasonable time. With regard to the manner of voting, I will direct the Chairperson of the Committee of the whole House to call for an electronic vote, where he or she finds it necessary to do so. Where it is necessary to call for a voice vote – I always call it a noise vote – the Chairperson will determine. Where you want to have an electronic vote, the Chairperson will determine, so that you can make reasonable progress.

I now ask you to be upstanding. We are going into the Committee of the whole House.

Hon. Members, I already bowed. You may sit. We can now commence the Committee of the Whole House.

Mover to move the amendments. Chairperson.

Hon. Chairlady, I beg to move:

THAT, Clause 2 of the Bill be amended - (a) in paragraph (a) in the proposed definition of “winnings” by deleting the words “without deducting the amount staked or wagered” and substituting therefor the words “excluding the amount staked or wagered in that transaction”; (b) in paragraph (b) in the proposed definition of “digital content monetisation” by— (i) deleting paragraph (e) and substituting therefor the following new paragraph- (e) offering for use a logo, brand or catchphrase associated with the content creator merchandise sales eBooks, course or software; (ii) deleting paragraph (h) and substituting therefor the following new paragraph– (h) a content creator earns a commission or fees from crowdfunding.

(c) by deleting the proposed definition of “person”. 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.

Hon. Chairlady, we are essentially changing the definition of the word “winnings” relating to betting, gaming, lottery, and prize competitions. This is why we are tightening the law on the profits made on a particular bet, so that the only money that can be deducted from the amount staggered is the amount that pertains to that particular transaction.

This amendment is just tightening the law. This matter has been litigated in court and we are just trying to make sure that the Act is aligned with the court ruling, and defines the gains made on betting by specifying that the only amount that will be deducted from the amounts wagered or staggered is the amount that is used for that particular transaction.

This also helps because there was a view that this could be abused where if, for example, you place a bet of Ksh1000 thrice and win after the fourth time, the deduction will be the stakes that you put during the three times that you bet before. This tightens up that law so that it is only the amount that is wagered or staggered for that transaction that is deducted.

With that, I beg to move the amendment.

Hon. Peter Kaluma.

Hon. Chairlady. Chair, I beg to move: THAT, Clause 2 be amended in paragraph (a) by deleting the proposed new definition of “person”.

No, I am giving Hon. Kaluma an opportunity to contribute to that amendment because he had a similar one.

Hon. Chairlady, did the Chairperson propose an amendment on the definition of the word “person”? I heard the Hon. Chairperson speak about a different matter. If the amendment is on the definition of the word “person”, I can contribute.

Hon. Kaluma, you had a similar amendment.

Thank you, Hon. Chairlady. I agree with the Committee to delete the definition of the word “person” for the reason that the proposed definition states that the word “person” includes in the case of an individual, a reference to a relative, as defined in Section 26(5), of that person. Section 26(5) is a provision of the Income Tax Act. The definition of the word “person” in Section 26 (5) includes your ancestor. In fact, it begins with ancestor, late relatives, deceased relatives, and many people. It means that you will be obligated to pay taxes for defaults even by your ancestors.

For that reason, I agree with the Committee that the definition be deleted.

Hon. Nyikal.

Hon. Chairlady, I beg to move:

THAT, Clause 2 of the Bill be amended by in paragraph (b) by deleting the proposed new definition of “digital content monetisation”. The import of this amendment is that all issues of digital content monetisation fall under paragraph 2(b) from (a) all the way to (h). That means that all those activities are now subject to taxation. We have been saying that the youth are trying to create content to raise money. We 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.

should not go ahead and tax them again. Therefore, I propose that the definition of the term “digital content monetisation” be deleted.

Hon. Mbadi.

Hon. Chairlady, I do not have a problem with supporting this amendment. The problem is that the moment we remove the term “digital content monetisation”, we must make sure that the provision in law that provides for Withholding Tax for content creators also falls. So, if you ask me, I would support Hon. Nyikal’s amendment so that we are completely silent on the issues of digital content in terms of taxation so that we exclude this important sector, the digital content monetisation and what we call content creators and allow the young generation, people who are unemployed that are trying to eke a living. Hon. Chairlady, I would request the House to agree with this amendment so that we remove the digital content monetisation completely from this Finance Bill which therefore means when it comes to the withholding tax, which will come to 5 per cent, then that will not be considered at all, because we have already removed from the definition the digital content monetisation.

Chairperson of the Departmental Committee on Finance and National Planning.

Thank you Hon. Chairlady. Let me make a clarification so that we move together. Hon. Members, Clause 2 has three sections. It has part (a) that talks about the definition of winnings, part (b) talks about the definition of digital content monetisation and his does not talk about the rate yet. We are just defining especially with what crowd-funding is and providing reference. Confirming is where you use, say M - Changa or WhatsApp to raise money for a particular cause. So, this amendment is not seeking to tax the amount of money raised in that particular crowd-funding but the fees that is going to be collected as an income to the person who does the crowd-funding. So, we are putting this under digital content monetisation so that they are available to tax. Part (c), has 3 parts. It is important that we tell the Members so that we know what we are doing. Part (c) is what Hon. Kaluma was talking about deletion of “persons”. The Committee has already proposed a deletion of that definition of persons that was giving liabilities to ancestors, family members and step brothers. So that is already moved as per amendment of Clause 2. With that I wanted to bring the House to speed. Thank you, Hon. Chairlady.

Hon. Chairperson, I was just letting you respond to the proposal by Hon. Nyikal then after that I will give you an opportunity to prosecute all your amendments as the Chairperson of the Departmental Committee on Finance and National Planning.

On a point of order, Hon. Chairlady.

What is your point of order, Hon. Mbadi?

Hon. Chairlady, what you have just told the Chairperson of the Departmental Committee on Finance and National Planning is what I wanted to say. The proposed amendment is about digital content monetisation.

It is okay Hon. Mbadi. If you are agreeing with me, then there is no need to...

Put the Question.

Just let him finish. You have a minute. 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.

You just say put the Question and you do not know what people are discussing! Hon. Chairlady, on the issue of rates, we will come to that and the moment we have done...

Okay thank you. Alright, we have heard you.

Division. Division.

Ring the Division Bell for five minutes and get all your cards ready. Get your electronic cards ready.

Hon. Members, I now order that the door be closed and the Bar be drawn. Take your seats. Kindly take your seats. Serjeants-At-Arms, close the door. As other Members had raised a query on the reason we should undertake Electronic Voting, I wish to bring to your attention Standing Order 70. Standing Order 70(1) says, “Unless the Speaker, for the convenience of the House, otherwise directs, voting on a division in the House shall be by electronic voting.” When the Hon. Speaker was in the House, he had directed that voting will be electronic. This is just to give you a reminder.

If there are Members who do not have their cards, just bring it to the attention of the Serjeants-at-Arms. Hon. Member, you are out of order. Do not shout. Just bring it to the attention of the Serjeants-at-Arms. Serjeants-at-Arms, nendeni huko. Just go and listen to them. Just bring it to the attention of the Serjeants-at-Arms. I will now just take you through. Now that the Bell has stopped, the doors closed and the Bar drawn, I would like to ask all Members to log out for 60 seconds. Okay. Let us wait for 60 seconds.

Hon. Junet Mohamed, I already heard you and we had agreed. Give Hon. Junet Mohamed the microphone. Hon. Junet Mohamed, proceed.

Thank you, Hon. Chairlady. What we have agreed on is that there are clauses we were going to vote on electronically. There are major clauses like on the Value Added Tax (VAT) and Housing Levy that we have to vote on physically. The other issues shall be by electronic voting. We have agreed that way. That is the position.

Hon. Members, have all of you logged out your cards? I can still see Hon. Betty Maina, the Member for Murang’a County is logged in. Hon. Liza Chelule, remove your card. Hon. Opiyo Wandayi, the Leader of the Minority Party, kindly pull out your card. Hon. Robert Basil of Yatta Constituency and Hon. Ibrahim Saney of Wajir North, also remove your cards. 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.

Hon. Members, remove your cards. Log out. I still have a number of people still logged in. Hon. Robert Basil, Hon. Babu Owino, Hon. Francis Masara, and Hon. Abdikadir Mohamed, log out. Good. Thank you. Let us wait for 30 seconds. Hon. Members, you may now log in. You may vote at the expiry of 60 seconds. You have an option to vote Yes, No or Abstain. Proceed. Hon. Members, it is now time. You may now vote.

There is a bit of challenge with the system. Just hold on for a few minutes. It is being addressed. Hon. Members, the IT team is looking at it. There is no need to get animated about it. There is no point to be animated about it. It is okay. We are going to do it. You know we have to try first.

Okay, Hon. Members. We shall start Roll Call Voting now because the system is not working. However, it was imperative to, at least, attempt to follow Hon. Speaker’s direction. Take your seats. Hon. Opiyo Wandayi, tell your team to take their seats. Your team is the only one standing. If you could kindly ask them to sit. Hon. Fatuma Mohammed of Migori County, kindly take your seat. The IT team has confirmed that 260 people are logged in. They are waiting to vote. Just hold on. They are trying to make sure everybody is on it.

Thank you very much, Hon. Chairlady. I have been in this House on several occasions during voting, and most of the times we have tried to vote digitally, it has not been successful. I am wondering whether it is a coincidence because this House has invested colossal amounts of money in making sure that we are able to vote efficiently, especially digitally. We must re-look at the entire (IT) team of this Parliament so that next time if they need any capacity, we capacitate them. We need to be efficient in terms of voting because I do not think this is normal.

Thank you.

Okay. This is what will happen; because we are already over 270 people who are logged in…

You have not logged in? Log in. I can see. Just log in and wait.

Hon. Mbadi, I can see your name. You can move to another table and try and log in on the other one.

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.

Hon. John Mbadi, I know that trick. You are trying to make sure that we go on and vote manually.

Can you come and do it for me?

Okay. Clerk, you will do that. All right. Let us give it one more try before we result to another method. Let us all log out.

Hon. Wandayi, let us all log out. Has everyone logged out? Okay. Let us wait for a few seconds. Yussuf Mohamed, Member for Wajir West Constituency, pull out your card. Now we can start again.

Amos Mwago, Member for Starehe Constituency, kindly remove your card. Do not log in until I tell you. Log out. Stay away until I tell you to log in. You can easily ask for a spare card.

Hon. Francis Masara, Member for Suna West, please log out. Hon. Musa Sirma, log out. Babu Owino, log out.

You can now log in.

You can now log in and wait until I tell you to vote. Log in and wait until I tell you to vote. Whoever has logged in, that is okay. Do not vote yet, just stay logged in. Hon. Members, remain logged in but do not vote yet. Once the IT team has counted the number of people who have logged in, then we shall vote. I will give you the all clear.

Hon. Mbui, you are out of order, and you will end up not voting. Take your seat. You are already logged in.

But I am a Member and I am in the House.

It is okay, that is your problem. Let us proceed.

You cannot threaten us, Hon. Chairlady. Why are you threatening us?

We will vote. We are going to proceed to vote but we are just waiting for the go-ahead from the IT team and then we shall proceed to voting.

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.

Hon. Mbadi, if you can just be a little patient. We are waiting for the all-clear if the log in is working. If it is not, of course we will default to the other system. Let us just be patient.

Hon. Wanami, you are out of order. Just be patient since we are trying to check the system. I said that in case the system does not work, you can get one from the Serjeant-at- Arms. They can bring you one. But you have read Standing Order 70, and you know it.

Just be patient for two more minutes. If it does not work, we shall revert to the manual system.

It is apparent that the system is not working.

Take your seats so that we can begin. Order, Hon. Members.

Hon. Members, I wish to bring to your attention Standing Order 76 which states that during division, Members shall maintain order in the House and shall be in their designated seats and must remain seated until the result is announced. So, Hon. Members, let us obey our own Standing Orders. Everybody can stay seated.

Hon. Member, do not argue. You are already standing. Not everything has to be aggravated. Can we have two people from the Majority side? Hon. (Dr) Pukose.

Hon. Dorice Donya take your seat.

Hon. Wanjala, you are out of order. I just read Standing Order 76 that you must maintain order and be seated during Division. If not, you will be out of order and may have to leave the Chamber. Members, take your seats.

Hon. Owino take your seat. Member for Mumias, sit down . Hon. Members, as we begin the Voting process, I wish to remind you of the Question. We shall have the names read out by the Clerk. All right, Members once your name is called, you pronounce your Vote from where you are seated.

Hon. Members, you have to rise up so that I can see you physically. Everyone should sit down because I have to see every Member voting, physically. That is why I am standing. Be silent. Kindly rise and speak up loudly. 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.

Hon. Fatuma Mohammed, you are out of order. You are supposed to sit silently on your seat. This is a second warning by the way.

Hon. Babu Owino has not voted.

That is a spoilt vote. Hon. Members, do not make a speech. Just say yes, no or abstain. Take your seat Hon. Babu Owino.

Order, Hon. Members! Hon. Daniel Karitho sit down, your name will be called again. ( Loud consultations)

We will also repeat and call out Hon. Atieno Bensuda to take her vote again. Thank you. Hon. Gertrude Mbeyu, Member for Kilifi County take your seat. Hon. Fatuma Mohammed this is the third time. Proceed.

Hon. Bernard Shinali, speak up! Order Members! Hon. Opiyo Wandayi, Leader of the Minority Party tafadhali, ask them to keep their voices down so we can hear everyone.

Hold on. Hon. Bernard, kindly vote again. Let us proceed.

Proceed.

Hon. Muchira, could you kindly take your vote again? Hon. David Njuguna Kiaraho? Thank you. Hon. Pkosing?

That is a spoilt vote. Can you say ‘yes’ or ‘no’?

Order, Members! Hon. Member, take your vote again. I perfectly understand that. It is the next sentence that was confusing, but she has clarified. You may take your seat, Hon. Gogo. Hon. Paul Abuor, could you take your vote again? Hon. Mwafrika? Hon. Nyamita, retake your vote.

Order, Hon. Members. Hon. Mbadi. What is the name of that Member? Hon. Waluke.

Hon. Members, for the last time, I will bring to your attention Standing Order 76 which says that during Division, Members shall maintain order in the House, shall be in their 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.

designated seats and must remain seated, until the result is announced. So, after this, I will declare you out of order and you will leave the Chamber.

Order, Members.

Order Hon Members. I will now proceed to announce the results of Division on proposed amendment to Clause 2 by Hon. Nyikal.

The manual vote count of the Division is as follows:

Ayes – 87

Noes – 189

Abstention – 3 Total votes – 279

The Noes have it. The Bars may now be opened. I now call upon the Chairperson of the Departmental Committee on Finance and National Planning to move all the amendments under Clause 2.

Thank you Hon. Chairlady. I beg to move: THAT, Clause 2(a) of the Bill be amended as follows: 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.

(a) In paragraph (a) in the proposed definition of “winnings” by deleting the words “without deducting the amount staked or wagered” and substituting therefore the words “excluding the amount staked or wagered in that transaction” (b) in paragraph (b) in the proposed definition of “digital content monetisation” by— (i) Deleting paragraph (e) and substituting therefore the following new paragraph- (e) offering for use a logo, brand or catchphrase associated with the content creator merchandise sales eBooks, course or software; (ii) Deleting paragraph (h) and substituting therefore the following new paragraph–

(h) a content creator earns a commission or fees from crowd

funding. (c) by deleting the proposed definition of “person”.

Order Hon Members. Order Whip of the Majority Party. Proceed Chairperson.

That is on the definition of winnings. The other amendment is on Clause 2(b) seeking to provide clarity on Paragraph (e) and (h) with reference to crowd funding. This is only applicable to digital content creators and all the funds raised on the particular cost. I would like to explain this without belabouring. This amendment seeks to only tax the income that is paid to the individual that does crowd funding and not the funds raised over the course of crowd funding. Hon. Chairlady, on (c) you may note the definition of the word “person” as proposed in the Bill defined a person as including ancestors, step brothers, step sisters, step sons and the other bold definition of persons. Our proposal as a Committee is to delete this Clause in order to give clarity and avoid undue burden to persons who may not be privy to the transaction that may be done by a person following the broad definition that was initially in the Bill. I, therefore, beg to move that Clause 2 be amended as per the Supplementary Order Paper. Thank you.

Let us proceed. I now call upon Hon. Makali to prosecute his amendment.

Thank you, Hon. Chairlady. 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.

My proposed Amendment is to delete Clause 2(b). The reason for this is the issue of the digital content monetisation. Earlier, I said I needed a procedural guidance. The reason I proposed we delete this is because it is tied to Clause 20. Clause 20, and we are not there on such a procedural question, I wanted to delete the taxation to the digital content creators. If you delete that, there would be no need for definition of this digital content monetisation. Unless it happens now, my Amendment, therefore, becomes redundant. Procedurally, I thought we should have gone through the other clauses because this is a definition. Thereafter, we can come to the definition as the last thing after we have agreed on what remains in the Bill. With that guidance, my position is, I do not think it is time we taxed our young people who are involved in digital content creation because that is a sector which is creating jobs for them. I thought this is a time to support them so that as we move into the future, we create a critical mass which can then be taxed. With these comments, I urge the House to support me so that we do not tax the young people who are doing Tik Tok creation at all. Thank you.

Hon. Kaluma, are you prosecuting the Amendment?

Hon. Chairlady, my Amendment was to delete the “Definition of Person” because it included ancestors. It has been carried in the Amendment by the Committee. I thank the Committee.

Hon. Mbui, can you prosecute your proposed Amendment?

Thank you, Hon. Chairlady. My proposal was that Clause 2(b) of the Bill be amended in the proposed definition of Digital Content Monetisation by deleting Paragraph (h) which was about crowdfunding for raising funds for specific goals for a content creator or another person. My concern was “another person”. However, I have noted that the Committee has proposed an Amendment to this and so, I drop mine.

Hon. Chairlady, I beg to move: THAT, Clause 4 of the Bill be amended in paragraph (a) in the proposed new sub-paragraph (ii)- (a) by deleting the words “three years” and substituting therefor the words “five years”; (b) by deleting the word “company” appearing immediately after the words “was realised by a” and substituting therefor the word “person”; 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.

(c) by deleting the word “company’s” appearing immediately after the words “thirty per cent of the” and substituting therefor the word “person’s”.

On a point of order, Hon. Chairlady.

Proceed, Hon. Mbui. What is your point of order? Hold on, Hon. Chairperson.

Thank you, Hon. Chairlady. When the Chair of the Committee is proposing amendments, it is only fair that he clarifies them for the sake of the people who are watching what is happening in this House. When he says that he moves the amendment as contained in the Order Paper and the Members just shout “aye”, we look like we do not know what we are doing. I propose that he clarifies what he is amending. That is how the House should run. Let us be fair.

Hon. Mbui, I have heard you and it is noted. However, we have already progressed to Clause 5. Let us proceed.

Thank you very much, Hon. Chairlady. I will endeavour to take less than ten seconds to explain what the clause is about.

Hon. Chairlady, I beg to move:

THAT, Clause 5 of the Bill be amended— (a) in paragraph (a) (ii) by deleting the word “disallowed” appearing immediately after the words “subscription fees” and substituting therefor the word “allowed”; (b) by deleting paragraph (b).

This particular Clause was proposing a double taxation on subscriptions made to institutions like clubs. When an employer contributes to those institutions, he is taxed and that particular benefit is taxed to the employee.

With those few remarks, I support the amendment.

I will give the opportunity to Hon. Mbadi. Proceed.

Hon. Chairlady, I support this amendment, but more particularly the one that is deleting paragraph (b). This would have subjected per diems that are paid to public officers to taxation and yet those paid to employees in the 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.

private sector are not subjected to it. It would have been unfair treatment to the public officers.

I support the amendment. Thank you.

Hon. Oundo.

Hon. Chairlady, if you look at the Supplementary Order Paper, I had an amendment that was not encumbered by Article 114 of the Constitution. However, it has already been overtaken by events. I also want to totally agree with the Chair of the Committee that my amendment has already been captured in the amendment. I totally support it, in respect of Clause 5 (b).

Thank you, Hon. Chairlady.

Give me the microphone. I will put the Question.

Chairperson.

Hon. Chairlady, I beg to move:

THAT, the Bill be amended by deleting clause 9 and substituting therefor the following new clause- Amendment of 9. Section 12C of the Income Tax Act is amended in section 12C of subsection (1) by deleting the words “but does not exceed or Cap.470. is not expected to exceed fifty million shillings” and substituting therefor the following words “but does not exceed or is not expected to exceed twenty-five million shillings”. We have turnover tax here and the Bill had proposed a minimum threshold be Ksh50 million but we are amending it to Ksh1 million up to Ksh25 million. With that I support.

Hon. Mbadi proceed. I can see there are only two Members who are interested.

Thank you Hon. Chairlady. What the Chairman is saying is not in the amendment he is talking about of raising the threshold to a minimum of Ksh1million, unless I have a different Order Paper. I can see it is not expected to exceed Ksh50 million and substituting therefore the following words ‘does not exceed Ksh25 million.’ So, the upper limit is being amended but I do not see the minimum Ksh1 million he is talking about anywhere. Unless I have a different Order Paper.

Give the Chairperson an opportunity. Hon. Mbadi take your seat so we can give him a chance to respond. You have made a very good point and allow the Chairperson to respond. 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.

Hon. CPA Mbadi you are correct. What is proposed in the Bill has the minimum threshold of Ksh500 million. The Order Paper captures only the lower limit which is an error. It is not capturing the minimum which should be Ksh1 million. Let me move my amendment again. I move that the clause be amended to include a minimum threshold of turnover tax of Ksh1 million to Ksh25 million. Thank you, Hon. Chairlady.

Hon. Jared, take your seat. I will just explain. You are right, there were amendments but those amendments were under Article 114. It is not among the ones listed by the Hon. Speaker. It is among the ones coming forward.

I have already said it. Let us proceed!

The Chairperson Departmental Committee on Finance and National Planning.

Thank you, Hon. Chairlady. I beg to move: THAT

Hon. Junet, you will have an opportunity as soon as the Chairman has finished moving! We have already moved. We are at Clause 10. Proceed Chairman.

Hon. Chairlady, Clause 10 as per what is on the Bill was proposing that taxes which are collected by agents especially Excise Duty and VAT, that seems to be what this particular clause was targeting be remitted to Kenya Revenue Authority (KRA) within 24 hours. After listening to the members of the public during our public participation, we proposed to amend that from 24 hours to within five working days. Therefore, this is taking care of weekends and holidays. It is not as punitive as it was proposed on the Bill to have these taxes paid within 24 hours. With that, I support, Hon. Chairlady. 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.

Hon. Junet, you may now have an opportunity.

On a point of order.

The Hon. Leader of the Minority Party, you can have your point of order. After that we can allow Hon. Junet to contribute.

Hon. Chairlady, I rise on a matter of procedure. I understand the urgency or the anxiety to have this process concluded but let us understand that we are dealing with Parliament, which is an institution that has a tradition that everyone is looking up to. At every clause, once it is proposed, it is important that you give Members who want to speak a chance to speak on one, two or three. That has been a tradition in this House. We cannot be turned into a voting machine. This is a Parliament of the people. Give one or two people time then you proceed to put the Question.

I agree with you Hon. Leader of the Minority Party. It is important to give Members a chance to debate. Except in those previous ones, there was no one who showed interest. However, in each case in the previous ones, I have allowed Hon. Mbadi, Hon. Kaluma, Hon. Mbui. Hon. Makali and Hon. Nyikal to contribute. We are going to allow Members to contribute when they want to do that. However, I have to first propose the Question before Members can debate it. Proceed, Hon. Junet. It was your turn. Hon. Jared, let Hon. Junet speak first.

Hon. Chairlady, I wanted to speak on Clause 9 which you have already passed. However, so that we avoid voting, if somebody is tired they can go home and sleep. We want to deal with this matter properly and perpendicularly.

Let us have Hon. Jared.

(Nyando, ODM)

Thank you, Hon. Member. I will just bring to your attention the exact Communication from the Speaker. The clauses that the Speaker allowed to proceed even when marked as falling under Article 114 of the Constitution are clauses 2, 24, 33, 34, 36, 43, 76 and 78. I have just asked the Clerks-at-the-Table to give you a copy of the Communication, so that you stand guided. We have not breached that Communication at all.

Proceed, Hon. Wamuchomba. I hope you are contributing to Clause 10.

No, Hon. Chairlady, I want to raise a concern on procedure. Since this sitting started at 2 O’clock, very few women have spoken on the Floor.

Two, if the Mover of a proposed amendment has clarified an issue, it is fair for us to be given an opportunity to contribute. That is procedural and it is what is supposed to be done on the Floor of the House. This is a House of debate. 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.

I want to raise my dissatisfaction with Clause 9. Even if we have moved on, my dissatisfaction should be registered.

Thank you.

Hon. Wamuchomba, Members will be given an opportunity to contribute after the Mover has moved the amendment and the Question has been proposed. Just add your name to the list.

Proceed, Hon. Chairperson.

Let us allow the Chairperson to proceed, then you can respond to the amendment. Okay, let us listen to your point of order, Hon. Mulu.

Thank you, Hon. Chairlady. From what Hon. Mbadi said, the Chairperson of this Committee amended Clause 9. Procedurally, he should have read out the amendment as it is in the Order Paper. He just explained the import of the amendment. Procedurally, he should have read the content of the new amendment.

He did not. He just explained.

Hon. Makali, the Chairperson of the Departmental Committee on Finance and National Planning said that you refer to the amendment as it is in the Order Paper. After that, he clarified that the amendment in the Order Paper was accurate. The inaccuracy came in when he was giving the import of the amendment. He agreed with Hon. Mbadi, went back and read the amendment as it is in the Order Paper, and he was fine with it. However, if that is the case, you can always repeat it. Chairperson, not Clause 9. We have already sorted that out. Move to the next one.

Hon. Chairlady, I beg to move: THAT, Clause 11 of the Bill be amended by deleting paragraph (a) and substituting therefor the following new paragraph- (a) in subsection (2) by− (i) deleting paragraph (g) and substituting therefor the following new paragraph– (g) the amount considered as representing the diminution in value of any implement, utensil, or similar article employed in the production of gains or profits, not being machinery or plant in respect of which a deduction may be made under the Second Schedule, at a rate of one hundred percent in that year of income; (ii) inserting the following new paragraph immediately after paragraph (ab)− (ac) affordable housing levies paid by an employer. Essentially, here we are providing that the Housing Levy be a taxable expense.

Order Chairperson, I think we are on Clause 10.

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You had already finished with Clause 10. So, we just need to put the Question.

Please ring the Division Bell for five minutes.

Order, Hon. Members. I now order that the Doors be closed and the Bar drawn.

Kindly take your seats. We need two Tellers from both sides. The Leader of the Minority Party, Hon. Wandayi, kindly let us have two Tellers. The Leader of the Majority Party, we need two Tellers.

Hon. Members, you have to rise and speak up so your vote can be noted. If that does not happen, we will count you absent. So, everybody should sit down. Hon. Musa Sirma. Please take your sit. Okay, start from No. 14. No, she has the wrong ones here. Order, Hon. Members at the back! Order! Serjeant-at-Arms, make them go back to their seats. Hon. Jessica Mbalu. Is that the Member for Mumias? Proceed.

Order Hon Members. Kindly take your seats, so that we see your colleagues when they rise to vote.

Order Members, please be seated. I now wish to announce the results of the Division on Clause 10: 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.

Ayes – 194

Noes – 79

Abstention – 1 The Ayes have it.

Hon. Members, just for the record, we have confirmed from the Hansard that under Clause 9, the Chairperson of the Departmental Committee on Finance and National Planning read the amendment correctly. This has also been verified by Hon. Mbadi. That matter is now settled.

Hon. Kuria, move your amendment.

Hon. Chairlady, I beg to move: THAT, Clause 11 of the Bill be amended by deleting paragraph (a) and substituting therefor the following new paragraph- (a) in subsection (2) by− (i) deleting paragraph (g) and substituting therefor the following new paragraph– (g) the amount considered as representing the diminution in value of any implement, utensil, or similar article employed in the production of gains or profits, not being machinery or plant in respect of which a deduction may be made under the Second Schedule, at a rate of one hundred percent in that year of income; (ii) inserting the following new paragraph immediately after paragraph (ab)− (ac) affordable housing levies paid by an employer.

We are adding this to allow contributions made by the employer to the Housing Levy to be a tax-deductible expense to the employer when calculating the cooperation tax for the employer.

Any Member who wants to contribute on this? Hon. (Dr) Ojiambo Oundo.

Hon. Chairlady, as much as this sounds correct and nice, we are now pre-empting debate hoping that Clause 76 will be carried. I do not know how to proceed because this predicates Clause 76. What happens if Clause 76 fails? We need guidance so that we do things in a neatly and orderly manner as we have always done in the past. We cannot pre-empt debate.

Hon. Member, let us not anticipate or speculate what will happen. Let us proceed and consider this clause now. Any other contributions? I will give at least two more people a chance. Hon. Jared Okello, you may proceed.

Hon. Chairlady, I align myself with the fears expressed by my friend Hon. (Dr) Oundo. This amendment references Clause 76. Therefore, 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.

one is premedicated upon the other. If we deal with this in a particular fashion, it may have adverse effects on Clause76. Therefore, your direction on this is key so that we run away from any confusion that may emanate out of Clause 11. This is a direct reflection of what is contained in Clause 76 which has generated a lot of debate amongst Kenyans. I know the Committee has already proposed to move the Housing Levy from 3 per cent to 1.5 per cent. Additionally, this has been moved from a Levy to a tax without capping. We really need a lot of direction on this so that we do not fall into the trap of the proponents of this clause.

Hon. Member, when we get to Clause 76, we will deal with it at that point. If necessary, this clause can be recommitted again or else we will be now acting on speculation. We have not dealt with this clause yet.

Lastly, let us have Hon. Owino.

Thank you, Hon. Chairlady. I think you have the discretion of rearranging Clause 76 to precede the others just as a matter of procedure. Is it very difficult to do that?

That will go contrary to the Standing Orders. Let us now proceed.

Chairperson Committee on Finance and National Planning.

Hon. Chairlady, I beg to move: THAT, Clause 12 of the Bill be amended in paragraph (b) (iii) by deleting the expression “(ii)” and substituting therefor the expression “(iii)”. This particular amendment is just a clean-up because it seeks to correct the reference of the provision to sub-section 2(j) which is being amended by the Bill. This is more of a clean- up for the Bill that I moved.

Hon. Jared Okello, let me see if there is someone else who wants to contribute so that it does not seem unfair that he is the only person talking. Any interests? Then I will allow Jared to contribute.

Hon Chairlady, allow me for the first time to align myself with deliberation as expressed by the Chairperson Committee on Finance and National Planning, that this is just to make it look tidy, and, therefore, there is nothing fishy or suspicious about this particular Clause. For the first time in the history of this country, I would like to support him.

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.

Chairperson Committee on Finance and National Planning.

Hon. Chairlady, I beg to move: THAT, clause 14 of the Bill be amended by: (a) Deleting the expression “subsection (3)” appearing in the opening statement and substituting therefor the expression “subsection (2)” (b) Deleting the expression “(4)” appearing in the beginning of the proposed new subsection and substituting therefor the expression “subsection (3)” This is more less of a clean-up because the proposed Amendment seeks to correct the reference to the subsubsection which is being introduced. The subsection being introduced under Section 18(a) of the Income Tax Act is Subsection (3) and not Subsection (4). Subsequently, Part(b) of the Amendment seeks to correct the reference to the correct subsection which is being introduced. The subsection being introduced under Section 18(a) of the Income Tax Act is Subsection (3) and not Subsection (4). It is a clean-up exercise. I support.

Put the Question.

I beg to move:

THAT, Clause 20 of the Bill be amended by – (a) by inserting the following new paragraph immediately before paragraph (a)- (aa) in subsection (1) by inserting the following new paragraph immediately after paragraph (o)- (p) digital content monetisation; 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.

(b) in paragraph (b) by deleting the words “twenty-four hours” appearing in the proposed new subsection (3AB) and substituting therefor the word “five working days”; (c) in paragraph (c) by deleting the words “within twenty-four hours after” and substituting therefor the words “within five working days after”. Hon. Chairlady, this particular clause has two areas where we are proposing for Digital Content Monetisation to be payable by non-resident persons with no permanent establishment. As with the current provision, it does not include non-residents. We are, therefore, netting over non-residents into this Digital Content Monetisation. Part (c), is also changing the time of withholding Rental Income Tax. The Bill proposes that this should be remitted within 24-hours. We are amending this to change from 24-hours to make it payable within five working days. With that, I beg to move.

Hon. Nyikal.

Hon. Chairlady, can we get more of the explanation? If we are including non-residents, how practically is it going to be implemented and taxes collected from the non-residents?

I will allow Hon. Mbadi to say something before I let the Chairperson or another Member answers that. Let us first have Hon. Oundo. Hon. Mbadi, I will come to you after. I will give you an opportunity to contribute, Hon. Oundo.

My understanding is that the non-resident persons will be taxed when they are in Kenya. I think we need to understand the definition of residency. It does not mean you have to be a permanent resident. There are a number of days in a year that if you stay in Kenya, then you are considered a resident person. If you have not stayed in Kenya for those number of days, then you are a non-resident, even when you carry out business activities. During that period that you are in Kenya and you are not a resident, then you become taxable. I guess that is what the Committee intends.

Chairperson, you can thank Hon. Mbadi because he has explained eloquently on your behalf. Do you want to respond?

Thank you, Hon. (CPA) Mbadi for that information. That is the correct intention of the Committee.

I will give the opportunity to Hon. Oundo and then we can close. We said that two Members would be contributing in each amendment.

Hon. Chairlady, I need your guidance. I had an amendment which was not subject to Article 114 of the Constitution—Clause 20 on page 617 of the Supplementary Order Paper. I need your guidance on how to proceed, since you have not called out the same. Thank you.

Hon. Oundo, if the Committee’s amendment is carried, then it covers the amendment that you actually wanted to introduce. Is it different?

Yes.

( Hon. (Dr) Ojiambo Oundo spoke off the record )

Proceed and then we shall get a counter-argument. 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.

Hon. Chairlady, I beg to move:

THAT, Clause 20 of the Bill be amended in paragraph (b)— (a) in the proposed new subsection (3AA) by deleting the proviso and substituting therefor the following new proviso—

Provided that only a person appointed by the Commissioner

in writing for that purpose may deduct tax under this section and

in appointing the person, the Commissioner shall ensure that the Cap. 533. person is registered by the Estate Agents Registration Board

established under the Estate Agents Act. (b) In the proposed new subsection (3AB) by deleting the words “within twenty-four hours” appearing immediately after the words “this section shall,” and substituting therefor the words “within three days” Hon. Chairlady, the Committee’s amendment was carried in two instances. I totally agree with you on the second part about the days of remittance. I withdraw my amendment. I had proposed three days but they had proposed five working days. In the first new subsection (3AA), I just want to move an amendment to basically tighten it up. It says that whoever is appointed to collect rent must be a professional registered with the relevant professional organisation, so that in the event of anything, other than any fines being imposed, there is professional fiduciary duty to remit the amount. That is all that I am requesting.

Hon. Chairperson.

Hon. Chairlady, the proposed amendment by Hon. Oundo can make a good provision and actually lead to more collection. However, remember, we also have a challenge of many landlords who do not necessarily appoint agents. They decide not to have them for the properties and rent becomes payable to them directly. In that case, therefore, this provision puts the landlords as the withholding agents. Secondly, this will also really distort the market of agencies. We have very many of them across the country that are mandated to collect rent and are not necessarily members of particular professional body as proposed. However, this can be done through an amendment to the parent Act. For example, the roles that are given to the Institute of Certified Public Accountants of Kenya (ICPAK) or Law Society of Kenya (LSK). That amendment will fit more there than amending the Finance Bill to require these landlords to appoint professionals. Let them continue using the agents whom they use for the collection of the rent. It is within their rights to do so. With those remarks, I thank you, Hon. Chairlady.

Hon. Oundo, are you satisfied with the explanation from the Chair? If you are, then you can withdraw your amendment.

Obviously, I am not satisfied with the explanation, Hon. Chairlady. I want to take the Chair to the specific provision in the original Bill. Clause 20(b)(3AA) says that a person who receives rental income on behalf of the owner of the premises shall deduct tax therefrom: provided that only a person appointed by the Commissioner in writing for that purpose may deduct tax under this section. Here we are not talking about the landlord but an agent appointed by the Commissioner. It is not asking too much that whoever is appointed must be legally certified to do the job he is appointed to do. The Estate Agent Act Cap. 533 is explicitly clear and the courts regularly hold that any person who earns as he purports to work... I can refer you to the case involving Kenya Railways Corporation. This is an illegal entity and has no force of law. So, if we are a country guided by 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.

the rule of law, why simply flout it for expediency? The Chair must understand this person is appointed, and we are not talking about landlords. In the event the Commissioner feels the landlord will not remit rent in good time, this person is appointed as an agent. How do you appoint an agent? Thank you, Hon. Chairlady. The matter belongs to the House to decide.

Hon. Kagombe.

Thank you Hon. Chairlady. This issue regarding landlords is very emotive. There has been a lot of misinformation and disinformation which has been deliberate so we vilify this Bill. I feel the sentiments of the people out there that they are being coerced to appoint agents. This is not the point of the committee but if you choose to have an agent collect rent on your behalf, they should remit tax at that point. We cannot force agents to belong to a certain body. As it is now, there is a desired position for them to be members of a certain body. The fact on the ground is there is no group or body that embodies them together. So, it would be in very bad faith to institute such amendments in this Bill. This is because we would be sinking them to a situation where they will lose their jobs. I support we go with the amendments as proposed by the Chairperson of the Committee. Thank you, Hon. Chairlady.

I see the Chairperson of the Budget and Appropriations Committee, Hon. Ndindi Nyoro.

Thank you very much, Hon. Chairlady. I think there is confusion on this issue with regard to a rent agent and a tax agent. Listening to Hon. Oundo, I think his amendment has already been taken care of. By all definitions, a landlord is a legal person who is liable to collect taxes for the revenue collector that is KRA. I also want to laud the committee and support the fact that they gave landlords flexibility from 48 hours to five days. Thank you, Hon. Chairlady. I submit.

Hon. Mbadi are you standing because you want to speak? Okay.

Put the Question.

I will now put the Question.

Mover!

Hon. Chairlady. I beg to move: 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.

The Mover, Chairman, Departmental Committee on Finance and National Planning.

Hon. Chairlady. I beg to move: THAT, clause 23 of the Bill be amended – (a) in paragraph (b), by inserting the following new item immediately after item (i)— (ia) in paragraph (f), insert the words “refining or” immediately after the words “means the” appearing in the definition of “manufacture”; (b) in paragraph (c) in the proposed new paragraph (1B) by deleting paragraph (b). 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.

Clause 23 has two Sections. The first one is to incentivise the area of manufacturing to include the word refining so that those particular sectors that deal with refining of pharmaceuticals within the manufacturing sector, get to benefit from this tax incentive. On Part (b), the Bill was proposing that the investment deduction allowances would not apply to businesses that are located in places which are outside Nairobi City and Mombasa County provided that the nature of their business necessitates them to be in those particular areas. We are now deleting that to allow any huge investments from any part of this country to enjoy this particular tax incentive without discriminating whether they are allowed to be there or not. If a company wants to go and invest in Kisii and do processing of bananas, being a banana growing region or potatoes in Molo, then they do not get to lose out on this particular incentive. Thank you, Hon. Chairlady.

We now move to Clause 24. It is one of those that the Hon. Speaker had agreed to give the opportunity to be prosecuted.

On a Point of Order.

What is your Point of Order, Hon. Mbadi?

Hon. Chairlady, I agree with you that the Speaker made a ruling that this was one of the clauses where he would admit proposed amendments by Members. They are basically amendments to the income tax rates. If we carry the rates proposed by the Chairperson of the Committee yet there are other better rates which the House may vote on, which ones will we work with? Will we still proceed to consider the rates proposed by other Members after voting on the rates proposed by the Chairperson of the Committee, or does that now disqualify all the other rates?

No. We will vote on the rates as proposed by the Committee, and then I will give an opportunity to each Member who had a different proposal. We will consider the proposals by each Member, and in fact, vote on each one.

Let us allow the Chairperson to proceed.

Hon. Chairlady, I beg to move:

THAT, Clause 24 of the Bill be amended in paragraph (b) - (a) by deleting sub-paragraph (i) and substituting therefor the following new sub-paragraph- (i) by deleting paragraph 1 and substituting therefor the following new paragraph-

1. The individual rates of tax shall be - Rate in each shilling

On the first Ksh288,000

Yes, Hon. Nyikal.

Hon. Chairlady, I had an amendment to that clause.

Let me propose the Question then I will allow you to debate.

Hon. Nyikal, I cannot hear you. Just put on your microphone and then repeat what you said, so that it can go on record.

In terms of sequencing, my amendment was to delete the entire paragraph. If my amendment is carried and the paragraph is deleted, the amendments by the Chairperson fall. In terms of sequencing, it would probably be better to deal with my amendment first.

Hon. Pukose, do you have a point of order or a point of information?

Thank you, Hon. Chairlady. If the amendment by the Chairperson passes, all other amendments fall. That is the order of precedence. You cannot amend the clause twice.

Please, Hon. Chairperson, complete moving your amendment.

Hon. Chairlady, I think it is very important that we carry Members along. Clause 24 has several sections which are quite material. In part (a), I have proposed a further amendment deleting the words “Ksh9 million” and replacing them with “Ksh9,600,000”. Part (b) demonstrates the beauty of public participation. The Bill had recommended a very beautiful formula for calculating repatriated income but had not provided a rate. We are 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.

now providing a rate of 15 per cent. We are also proposing a rate of 20 per cent for digital content monetisation for non-residents. Part (c) proposes amendments to sub-paragraph (vii) seeking to harmonise tax rates for sales promotion, marketing, advertising services and digital content monetisation. Part (d) provides for resident digital content monetisation at the rate of 5 per cent.

Lastly, part (e) seeks to amend the advanced tax paid on trucks, pick-ups, movers, and trailers to Ksh2,500 per tonne, down from the proposed sum in the Bill of Ksh3,000 per tonne. It is important that the five amendments be captured in the Hansard .

With that, I beg to move the amendment.

I will allow Hon. Nyikal, Hon. Atandi, Hon. Mbui, and Hon. Waluke, Hon. Amisi and Hon. Oluoch to move their amendments.

On a point of order, Hon. Chairlady.

What is your point of order, Hon Masara?

Thank you Hon. Chairlady. Now that this particular clause has a lot of contentions, I suggest that instead of leaving the Chairperson to move his amendments first, we should go through all other amendments so that in areas where there is concurrence with other Members, we agree as a House; where there is a difference in opinion, we can vote on the same. That is my proposal. Instead of the Chairperson going through many other avenues and the Members have not been given an opportunity to participate in the House, let us give them first the opportunity to prosecute their case and then we agree as a House. Thank you, Hon. Chairlady.

Hon. Masara, those are not the rules. Let us allow the Members to move their amendments. That sounds like a logical way of doing it, unfortunately it is contrary to the Standing Orders. Let the Members move their amendments but we will have to vote on each of the amendment. Let us proceed Hon. Nyikal. We will start with you because yours was the biggest chunk.

Hon. Chairlady, I beg to move: THAT, Clause 24 of the Bill be amended in paragraph (b)— (a) by deleting sub-paragraph (i); (b) in sub-paragraph (vii) by deleting the proposed sub-paragraph (m); (c) by deleting sub-paragraph (x). The import of the amendment is that it would go back to the Act as it is now so that there would be absolutely no increase in the taxes. The taxes will remain as they are and the maximum would be 30 per cent. Paragraph (b) is based on monetisation which had passed. Had that failed, then it would have been necessary to delete it to harmonise. The same goes for (c). In my case, I propose we go by (a) which says that we delete sub-paragraph (i), that is, all those rates and leave it as it was before. Hon. Chairlady, that is my amendment.

Hon. Makali, let him have his chance.

Hon. Chairlady, I beg to move: THAT, Clause 24 of the Bill be amended in paragraph (b)— (a) in sub-paragraph (vii) by deleting the proposed sub-paragraph (m); (b) by deleting paragraph (x). The thinking behind this, Hon. Chairlady, is taxing digital content creators. While I have no problem with taxation of those who are from outside this country, the foreigners, my 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.

proposal is that for the locals, Kenyans, I have no tax for this category. The Chairperson proposes that we tax them at 5 per cent. As I said earlier, this particular sector has created a lot of jobs for our young people. This is the time to encourage them so that we build a critical mass and maybe, in the future, tax them and collect a lot of money. Thank you.

Hon. Chairperson.

Thank you, Hon. Chairlady. Just to give additional information, the proposed withholding tax on digital content monetisation as per the Bill was proposed at 15 per cent. The Committee reduced that from 15 per cent to 5 per cent. Why 5 per cent? All professional fees—whether it is management fees, legal fees, and accounting fees— are charged at a withholding tax of 5 per cent. However, nothing stops these digital content creators from paying tax as per the Income Tax Act. When they are filing their returns at the end of the year, they just need to declare the amount of money withheld as withholding tax. That becomes allowable because it is treated as an advance tax. So, it is 5 per cent to get in line with all management fees. It is like a pre-payment. That is so that, at the end of the year, they can just calculate their income tax as per the tax bands in the Income Tax Act.

Hon. Ndindi Nyoro, the Chairperson of the Budget and Appropriations Committee.

Thank you very much, Hon. Chairlady. Mine is more procedural. Since we have several amendments on the clause, my proposal would be that we hear all other amendments as we are doing. There will be no consequence continuing to vote for the rest when we start with the Chairman’s amendments and we vote for them. Automatically, the rest fall when we uphold the Chairman’s amendments.

Hon. Members, let us proceed with allowing other Members to move their proposed amendments. When it comes to voting, we will go to each of them. We will see what the consequences are when we vote the first time. Let us have Hon. Mbadi before we put the question to Hon. (Dr) James Nyikal’s amendment.

Hon. Chairlady, I am a bit disturbed with the reasoning by the Chairman of the Departmental Committee on Finance and National Planning. He tells us that we should leave withholding tax on digital content monetisation. Actually, are you proposing to make it at 20 per cent? Then he is telling us that they will file returns and maybe refunded at the end of the year. Why would you want to keep someone’s money for the whole year? These are strugglers. These are the hustlers. They are the real hustlers, not the ones pretending to be hustlers. The people involved in digital content are the real hustlers. Do not keep their money. My view is that we must lower this withholding tax to 5 per cent. Where is that in the Bill? I am not seeing it. What I am seeing here is totally different. Maybe the Chair should explain.

Let me give the Chair a chance to respond to that before I let Hon. (Dr) Ojiambo Oundo speak.

Hon. Chair, what is proposed in the Bill is a withholding tax of 15 per cent. After listening to digital content creators, they asked why we are charging them 15 per cent as if they are not like other professionals—lawyers and accountants. The withholding tax for all these management fees is 5 per cent. Therefore, we have made them at par with the rest, at 5 per cent. I want to explain the bit when it comes to the end of a year. For example, you may have earned an income through digital content monetisation but it is below the taxable threshold of Ksh24,000 in the Income Tax Act. That allows you the option if you want. It is optional. If you want, when filing your returns at the end of the year, you may declare that you earned this amount of money in the course of the year and 5 per cent withholding tax was withheld on income. That income, plus any other 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.

income you get, will be subject to income tax as per the Income Tax Act and the particular tax bands. It is the same thing that applies to management fees. If a doctor is paid consultancy fees and that money is withheld, they are allowed to claim that as advance tax, and apply the tax bands as per the Income Tax Act at the end of the year. I think we are now together, CPA Mbadi. Thank you, Hon. Chairlady.

Hon. Mbadi has now conceded on that one. Hon. Oundo.

Hon. Chairlady, I think there is a bit more confusion that could arise from the way the Supplementary Order Paper is presented, or for those of us who have no adequate background in accounting. If you go to page 592 on (r) in case of digital content monetisation, you will find 20 per cent of the gross amount and then on the next page it says we are coming from 15 per cent to 5 per cent. It needs to be very clear. Not all Kenyans will have this. Not even the journalists who will report tomorrow will be able to distinguish what exactly is being talked about here. The Chairman needs to be very clear. When does the 20 per cent apply and when does the 5 per cent apply? You remember in Clause 2 we raised that concern that this is an asset industry that should have been left to flourish before we punish it heavily as we are proposing. Let him just clarify the 20 per cent and the 5 per cent for purposes of those who are not here and do not understand.

Hon. Chaiman, do you want me to give a chance to two people then you can respond once. Okay.

Hon. Oundo, through the Hon. Chairlady, on page 593 of the Order Paper, it reads in clause (d) ‘in sub-paragraph (vii) in the proposed paragraph (m) by deleting the word “fifteen” and substituting therefore the word “five”’. We are substituting 15 per cent with 5 per cent. The consequence of that is that the withholding tax that is going to be held to digital content monetisation is, therefore, going to be 5 per cent and not 15 per cent, as per the Supplementary Order Paper.

Thank you, Chairman. I have seen you, Hon. Robert Basil. Let me just give Gathoni Wamuchomba, Member for Githunguri Constituency a chance then I come to you.

Thank you, Hon. Chairlady. I want to put more weight on this confusion that has been created between the 5 and the 15 per cent on the two different pages as cited by Hon. Oundo. While I put more weight on that confusion which I think needs to be clarified, I honestly feel that the people who are heavily in digital monetisation are the young people. Most of these people are people below the age of 35 years. This is the Access to Government Procurement Opportunities (AGPO) group, the group that we call affirmative group. Therefore, dealing with this category of Kenyans as any other body of professionals and imposing on them the 15 per cent, now down to 5 per cent, I still feel that we are not being very fair to this category of digital monetisers. Therefore, I still feel that this Bill needs to be re-looked at more, if possible, so that we can take care of this asset industry. That is the growing category of industry.

Hon. Robert Basil, Member for Yatta Constituency.

Thank you, Hon. Chairlady. I am looking at the individual rate taxes — the one on the first rate of Ksh288,000 and the next of Ksh100,000. If you sum them up, it comes to 35 per cent. If you go down the one earning Ksh9.6 million, you are taxing 35 per cent. I find this to be ironical and I would appreciate clarity from the Chairman. Why would you overburden the upcoming middle-income earners, and peg the tax at 35 per cent for those earning a lot of money? It does not make sense at all. It will, therefore, be appreciated if the Chairman could explain. 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.

My proposal on the same is that if we could make the one earning Ksh288,000 be taxed at a rate of 5 per cent, and the next Ksh100,000 at 5 per cent. The two could come to 10 per cent, which make more sense and would support upcoming middle income. Thank you.

Hon. John Kiarie.

Hon. Chairlady, on this one, I would like to go on record that this is one of those clauses that has been extensively prosecuted. Not only in the Committee but also with practitioners in this industry. Cohort upon cohort of Digital Content Creators have been engaged on this matter. If there is one thing each of them agreed to, is that there is reasonable purpose for them to be equalised like any other profession. In fact, their biggest argument was that it should be reduced from the 15 per cent that had been initially proposed to what is now appearing on the clause as five per cent. Anyone who feels that they had paid beyond what they want after their declaration at the end of the year can reclaim.

In essence, the Withholding Digital Tax on Content Creators is the five per cent that we see on the clause and should be the informing principle to this debate.

I support.

We now want to put the Question to Hon. Nyikal’s Amendment so that we can hear from the Mover of the Amendment. We all agreed that we have three people on every Amendment. You will have an opportunity. It is the same Amendment as Hon. Mbui’s. You will have a chance to contribute to it. The Chair has explained. Hon. Members, so that we can make progress, there is still some Amendments to this clause coming after three more Members speak. Proceed, Hon. Mbadi.

Hon. Chair, for this House to make informed decision especially on this matter of Income Tax bands, we need to be very clear on what we are doing. Hon. Members, the Chair of the Committee is proposing that the first Ksh24,000 per month should be taxed at 10 per cent. Let us not go with the annual figures which is the way it is even today. The next Ksh8,333 should be taxed at 25 per cent as it is today. The changes come from the 30 per cent bracket. All the amounts above Ksh32,333 right is now taxed at 30 per cent whether you are earning Ksh10 million. What we are being told is that the next Ksh467,666 per month should be taxed at 30 per cent. If you add those three figures, they come to Ksh500,000. The next Ksh300,000 should be taxed at 32.5 per cent meaning up to Ksh800,000. Anything beyond Ksh800,000 will be taxed at 35 per cent. That is the proposal by the Chair. Other colleagues are proposing better rates. Therefore, we better decide whether we are going with these better rates. For instance, the one for Hon. Kaluma will only allow taxation of 35 per cent for the ones earning over Ksh1.2 million per month. I was saying that because she said we can dissipate all these Amendments together. We are on the same Amendments. Leader of Majority Party, you look too tired today. What is happening? I think we need to allow the Leader of Majority Party to go and have something.

Thank you, Hon. Mbadi. I think we can now put the Question.

Sorry! Apologies. Apologies. I said Hon. Nyikal instead of Hon. Chairperson. It was a slip of the tongue. Let me now put the Question again. Serjeant-at-Arms in one minute you can close the doors because you already rang the bell. You may now close the doors. Order, Hon. Members! You may be seated so voting can begin. Can the respective whips get their Members to take their seats? Hon. John Mbadi get your Members to take their seats. Order, Hon. Opiyo Wandayi! The Serjeant-at-Arms talking to Hon. Opiyo Wandayi is out of order because he cannot engage with a Member instead of... We are having a division and are going to vote. I 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.

did not call the final question. Let us proceed. Hon. Members take your seats. Can we have two people from each side? Okay, the tellers are here. Let us proceed. Call the names.

Hon. Members. Let me put the question again.

Hon. Members, every individual has to vote individually.

The bell has been rung. Hon. Zamzam I will hold you out of order and withdraw you from the House. Be seated and let us proceed. Hon. Zamzam you are out of order. Let us proceed with the voting. Voting will not be done in a chorus. Each person will vote for themselves.

Hon. Members, let us begin again.

If it is a chorus then it will be a spoilt vote. Let us allow the person to vote themselves. Proceed.

Hon. Members, that is out of order. Hon. John Owino Walter is not in the country. You cannot vote on his behalf. Let us proceed. Could the Sergeant -at-Arms get more microphones and take them to the person when called.

(Bumula, DAP-K)

Why are our machines not working, Hon. Chairlady? Somebody should be fired. The Serjeant-at-Arms keep on running up and down. We should vote electronically because we are tired. Members do not want to defend their welfare.

Order. Members. On the Question that Clause 24 be amended as proposed by Hon. Nyikal, the results are as follows:

Ayes – 79

Noes – 183

Abstention – 0 The Noes have it.

Hon. Mbui, you can move your Amendment. You can avoid Paragraph 1 because that has already fallen under Hon. Nyikal’s Amendment.

Open the Doors. 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.

Oh, sorry. Please open the Doors.

Hon. Mbui, you may proceed.

Thank you, Hon. Chairlady. My proposals were four. The first was a deletion of subparagraph (1), which is the one that you have alluded to of the pay as you earn tax rates. The second one, (b) was a deletion of Paragraph (8), which is on the advanced tax for Vans, Pickups, Trucks and Prime Movers. It proposes to increase the advance tax to 3000 per tonne of load capacity. The other proposal I had, was to delete sub paragraph (9), which also proposes an advance tax for Saloons, Station Wagons, Minibuses, Buses and Coaches to a Ksh100 per passenger capacity. The last one (d) was deletion of sub paragraph (10), which is the one that proposes to change the term of attacks from one per cent to three per cent.

Leader of Minority Party.

Do I proceed? Hon. Chairlady, I want to add my voice to this proposed amendment by Hon. Robert Mbui. I support it. If we fail to delete this Clause and remove these taxes, we, as a House, shall have succeeded in condemning those young entrepreneurs who have chosen to invest in commercial vehicles. We will punish them for choosing to be risk-takers and investing their hard-earned cash in commercial vehicles. I, therefore, urge Members that the only recourse that we have to right this wrong is supporting Hon. Robert Mbui’s proposed amendments. Otherwise, this whole thing will make a joke of our commitment, as a country, to support small and upcoming businesses, entrepreneurs and risk-takers. If we support them, they can contribute immensely to the economic development of this country. Indeed, they can create numerous employment opportunities for our youth who are wallowing in unemployment that has now reached alarming proportions.

Thank you, Hon. Chairlady.

On a point of order, Hon. Chairlady.

I need to see if there is someone else who has not contributed. Raise your point of order, Hon. Junet.

Hon. Chairlady, these taxation measures will be very punitive. The tax is being increased from Ksh1500 to Ksh3000 at once, and from Ksh60 to Ksh100 per passenger per matatu . Both sides of the House should agree that this amendment is not good. It will kill many small businesses, especially in the matatu sector. The turnover tax has been increased from 1 per cent to 3 per cent. The tax of the people with trucks and small cars will be increased from Ksh1500 advance tax to Ksh3000. This will too much. Let us agree to reduce these taxes. I hope that the Chairman of the Committee can agree to reduce them.

Chairperson of the Departmental Committee on Finance and National Planning, let us have your response before we put the Question on the amendments proposed by Hon. Mbui.

I thank Hon. Mbui for this proposed amendment. I looked at it but I do not agree with it. These are many digital content creators who generate a good….

Are we talking of the advanced taxes on vehicles? 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.

Yes.

Thank you. I thought Hon. Mbui would start by first appreciating that we have reduced the proposed tax as per the Bill from Ksh3000 to Ksh2500. Let everyone pay the rightful share of tax. In fact, people are looking at it as if it is a new amendment. It is just an increase of that particular tax. It is there in the Finance Act. We really urge Hon. Mbui to allow everybody to pay their rightful share of tax.

On the issue of advance tax again, remember the discussion we had earlier on digital content creators. If the operators of these vans and trailers feel that the rate is too high…. If they can agree to file the correct tax returns, then they can only pay the income tax as per the tax bands. We encourage them to pay this advance tax. If you really want to be tax compliant towards the end of the year, file your returns and then advance tax will be deducted from your income tax that can only be charged as per the tax bands in the Act.

We are not increasing the turnover tax from 1.5 per cent to 3 per cent. Remember this House, in the last Parliament, approved the turnover tax to be 3 per cent. The reduction from three per cent to 1.5 per cent came as a precautionary measure to help our business during the COVID-19 time. We all agree that COVID-19 is behind us. We are encouraging them to pay the three per cent. This particular tax is on turnover and not profits. Using the same logic at the end of the year, when they file their returns, they will deduct what they have paid as per the tax band in the Public Finance Management (PFM) Act.

Thank you. The Leader of the Majority Party.

Thank you, Hon. Chairlady. We need to understand this is an advance tax. The English meaning of advance payment is that it is not a final tax. So, whatever quantum you pay, at the end of your financial year, if you do your annual income tax returns and realise you overpaid, you can get a credit from KRA.

Therefore, I implore on Hon. Robert Mbui to drop this amendment and allow us to progress. We do not need to vote on this. You know he is a good teacher and understands the little meaning of the word ‘advance’, that you pay in advance but it is not your final tax. At the end of the financial year; by 30th June, that is at the end of this month, if you are a transporter like me, I will do my annual returns and if I find the advance tax, I paid is below what I ought to have paid as income tax, I will top that payment. If I find during my returns that I overpaid, I will get a credit. The earlier you pay tax the better. Even the Holy Bible says, ‘give to Caesar what belongs to Caesar’.

Order, Members! I can only pick one person at a time. Hon. Mbadi, your hand was raised first. We said for each amendment we will have two people.

Let me say something. First of all, this… Hon. Jared Okello, you will be disciplined. I am the Chairman of your party. The National Chairman of your party is on his feet.

Hon. Member, please allow Hon. Mbadi to proceed.

Hon. Chairlady, I want to say the notion that advance tax is okay for the taxpayer is very wrong. There is no reason why you should borrow money as a Government from people who are very poor. Let them wait until the end of the year to file their tax and pay progressively. This idea of asking people to pay tax in advance… For example, a person bought his truck on loan and you want him to pay tax in advance. What for?

Finally, the issue the Chair of the Committee raised is very fundamental but he is wrong on the percentages; it is not 1.5 per cent but one per cent. Again, we are talking about who?

or those selling sweets on the roadsides to file tax returns? Administratively, it is very difficult. If only this House can be considerate to the downtrodden. We have 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.

successfully made amendments to exclude some of our payments like per diem . Yet, a hustler out there like mama mboga who we were addressing in our public rallies - I hope they are seeing how they were deceived and duped by Kenya Kwanza… No one cares about them so they should pay advance tax. Hon. Chairlady, let them pay advance tax. However, I support Hon. Mbui’s amendment.

On a Point of Order.

Hon. Leader of the Majority Party, what is your Point of Order?

Hon. Chairlady, it has been overtaken since Hon. John Mbadi has sat. Nevertheless, I can say that it is good you allowed us to ventilate on the issues here. However, we should not pontificate our political stands because we also have that option. It is also good to inform Hon. John Mbadi that he is an accountant, though a junior one in terms of professional qualification. I know he is older than me by age but in terms of CPA qualifications, he knows I qualified when I was still a student at the university as a junior finance officer. He knows there is something in accounting called a pre-payment. Whatever he is saying that Government is borrowing from people is wrong. It is not Government borrowing, it is simply tax payers being asked to make a pre-payment of what they owe to the Government.

When you are a rich man like Hon. Kimani Ichung’wah or Hon. Junet Mohamed, who run a fleet of vehicles in Kikuyu and Easteligh respectively, you pay advance tax because we owe it to the people of Kenya. We owe it to the hustler nation to pay our taxes in advance so that the children of hustlers can get capitation for day and Junior Secondary School (JSS). Therefore, I once again oppose the amendment by Hon. Robert Mbui. Hon. Chairlady, we all oppose!

Okay. Thank you, Members. We had said we are giving two chances only to the Members who want to respond to it so that we can move. There is still an amendment on this particular point.

We are going to move to Hon. Oluoch’s amendment and you will have a chance to ventilate again on this issue.

Hon. Junet, you are the only one I will give a chance and then we move on to put the Question.

Hon. Chairlady, when we are legislating here, we are doing that for all Kenyans whether you are rich, poor, middle level or whatever. You can only be sure of how much tax you need to pay after an assessment on your books. What Hon. Mbadi is saying is true. This is borrowing from the people. Government is telling you: Pay us in advance then later when you assess your taxes and you are supposed to pay this much then you can deduct from your books. Government can then say: I had already advanced you this much. However, Hon. Chairlady what we are opposed to and why we are supporting Hon. Mbui’s amendment is that the rate is very high. It was just Ksh1,500, it was increased to Ksh3,000 but now reduced to Ksh2,500. Why not let it remain at Ksh1,500? What has changed in the pockets of Kenyans? Kenyans are as poor as they were when COVID-19 was there and in 2021. Let us be considerate to Kenyans. We are fighting for the hustlers, the people who 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.

brought you to power, we are not fighting for our people. ‘ Watu wetu wamezoea shida’ . We are fighting for your people; the hustlers who gave you power.

Thank you Members. I think we have ventilated sufficiently on this particular point. It is coming again under Hon. Oluoch’s Amendment.

Hon. Oluoch, you may move your Amendment.

Thank you, Hon. Chairlady. I beg to move: THAT, Clause 24 of the Bill be amended in paragraph (b) - (a) by deleting sub-paragraph (i) and substituting therefor the following new sub-paragraph- (i) by deleting paragraph 1 and substituting therefor the following new paragraph- 1. The individual rates of tax shall be- Rate in each shilling On the first Ksh288,000 10% On the next Ksh 100,000 25% On the next Ksh 212,000 30% Above 600,000 30.5%

(b) in sub-paragraph (vii) by deleting the proposed sub-paragraph (m); (c) by deleting paragraph (x). The justification for this is that the Withholding Tax, which has been put at 5 per cent having been dropped from 15 per cent, literally targets the very people whom we call “the hustlers”.

Content creators who we seek to ask to pay 5 per cent Withholding Tax are not the sort of persons that my good friend, Hon. KJ, refers to as professionals. It takes some time to develop content. Even after you develop content, it takes time to create more. Taking away 5 per cent from this hustler, or that person for whom we have set up digital corners and ICT hubs in Mathare and elsewhere, is impoverishing those people during hard economic times. The economy is struggling.

We ought to have staggered this provision and put them in different bands where those who earn below Ksh500,000 from content creation are exempt. Thereafter, if you make Ksh500,000 to Ksh1 million from digital content, you pay x amount. If you earn Ksh3 million from making digital content like my good friend, Hon. Jalas, you are then liable to pay x amount. But putting a blanket figure on that person in my Mathare Constituency who makes Ksh50,000 or Ksh100,000 from content creation and has to wait for another three months to develop more to earn more money is punitive, especially at a time when the economy is struggling. This hits at the very core and at the very heart of the hustler nation.

I persuade you to drop this provision and exempt those that are affected by this.

I beg to move the amendment, Hon. Chairlady.

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I will give a chance to the Leader of the Minority Party, and then I will come to you, Hon. Babu. We have to go in the order of seniority. Let your leader go first.

Hon. Chairlady, I support this proposed amendment by Hon. Oluoch for the simple reason that we have no justification whatsoever to punish young talented Kenyans, who are basically eking out a living from their own creativity. If we are to be fair to the youth of this country, this House should support the amendment by Hon. Oluoch in one accord. Otherwise, how will the youth ever get a chance to prosper? They are investing in content creation, and yet we are proposing a tax regime that will run them out of business. If we really mean well for the youth of this country, this is the time that we must stand firmly on our feet as a House and say “yes” to Hon. Oluoch’s amendment.

Thank you, Hon. Chairlady.

Hon. Babu Owino.

Thank you very much, Hon. Chairlady.

Hon. Lesuuda, let us first finish with Hon. Babu Owino.

Thank you very much, Hon. Chairlady. On the issue of content creation, content creators are very poor people. The Kenya Kwanza Government campaigned on a platform of a bottoms-up transformation agenda. Did the bottoms-up agenda mean stealing money from those at the bottom and feeding those at the top?

For content creators to earn a living, one must have viewership of around 3 million to earn Ksh10,000. Is it really fair to punish Kenyans? The Kenya Kwanza Government promised 1 million jobs within the first year, which they never delivered. They are already punishing poor Kenyans.

Two, content creators who get jobs on their own are being punished for creating jobs for themselves. If you must lie to people then lie like a priest. How did a priest lie? A story is told of a priest who was crossing a border going to another country. They were supposed to be checked…

Hon. Babu Owino, we are not supposed to be debating. You should either support the amendment or oppose it. This is not a debate. Proceed and wind up.

Hon. Chairlady, what I am going to say is in line to support the amendment by Hon. Oluoch. That is why am bringing it from far. I know some of us here might not understand what I am trying to say. Let me finish that story because it is an appendage of my conclusion in supporting Hon. Oluoch’s amendment.

Thank you. Hon. Bensuda, and then we can put the Question.

That is very unfair Hon. Chairlady. Let me finish my submission.

I thought you had finished Hon. Babu.

Hon. Chairlady, it is very unfair because I am the only Member that you are trying to cut short. Let me just finish it in support of the amendment. I said if you must lie, lie like a priest. A story is told of a priest who was going to cross a border to another country. The priest was accompanied by a lady. The lady had something that she needed to declared before crossing the border. The lady decided to put the item into the priest’s pocket. On reaching where they were supposed to declare, the security asked the priest what he had to declare. The priest said that, “from my belt upwards, I have nothing to declare”. The security officer asked the priest, “what about from your belt downwards”? The priest said, “from my belt downwards, I have something precious to ladies”. He was allowed to passed. The question is ….

Thank you Hon. Babu. You have completed. You are debating again instead of talking about the amendments. Thank you. Hon. Bensuda. 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.

Thank you very much Hon. Chairlady. I rise to support the amendment by Hon. Oluoch on content creation exemption. As a Member of the Departmental Committee on Communication, Innovation and Information, it is unfair to start imagining imposing tax on what we have not achieved as a country in digitalising social-economic empowerment for the youth which is an opportunity for their job creation. I rise to support the amendment because in the first place, even the proposal, in provision of the ajira for technology in the constituencies has not been measured to be effective. I rise to support that even the content creators are struggling. They are fighting for the small space that they have procured within the market to sell the commodities or to ensure that other aspects are done. The same same Government has not come up with a framework to ascertain the level of achievement and success in digitalising and providing for the ajira . Some of them are struggling with bundles and internet. Hon. Chairlady, I support that content creators must not be subjected to this tax. In other amendments, we must consider all the facts which are relevant. Let us stop pretending; let us not tax everything. Let us go by the proposal of Hon. Oluoch. I support.

I give a chance to the Chairperson of Departmental Committee on Communication, Information and Innovation, Hon. K.J.

Hon. Chairlady, this amendment could never have been brought by a better person than the Hon. Member for Mathare. The part that we are not telling about this content creation digital tax is the journey that we have walked. Hon. Chairlady, the proposal by the Committee on Finance and National Planning seeks to do two things. One is to bring equity. This is the House mandated by the country to ensure there is equitable distribution of resources but also an equitable carrying of the burden. Every profession in this country pays tax. Every profession is taxed at a certain rate. The journey that we have walked from the time the proposal was made is that this tax has been reduced from an up of 15 per cent to where we are now, at 5 per cent. The argument we made, we who are concerned about the real content creators, was that they cannot be inequitably taxed. If other professions are being taxed at 5 per cent then digital content creators should also be taxed at not more than 5 per cent. The truth of the matter is that there has been a 15 per cent reduction from the proposal to where we are. I stand to support.

Thank you.

Chairperson of the Departmental Committee on Finance and National Planning, you can now sum up all the moved amendments.

Hon. Chairlady, I really want to thank all the Members that have proposed amendments on this clause. I am loving the discussion we are having in this country about digital content creators. This was a profession that nobody was talking about. This proposal has made us spend the last one hour talking about something called digital content creation, which means everywhere across the country is asking what this is. Therefore, we are starting to have a sober and open conversation about this sector. 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.

A quick comment on the two proposals—the advance tax on vans and now this digital content creation. That primary school teacher who sacrifices his time to go and teach Early Childhood Development (ECD) children, that nurse who spends very many hours in the theatre or taking care of patients in Intensive Care Unit (ICU), and that medical doctor who spends hours on end doing operations will pay their rightful share of tax. We are just saying let everybody pay their rightful share of tax. We have been unfairly targeting employed people so that they are the only ones paying taxes. Now, let us have everyone there.

Hon. Chair, help us to sum up the exact amendment then Members understand what they are voting on that is your proposed amendment.

Hon. Chairlady, I had done this. Just for the record, again, the amendment proposed by the Committee on Finance and National Planning is that Clause 24 to be amended by deleting that Ksh9 million to have Ksh9.6 million. That withholding tax from digital content creators be reduced from 15 per cent as proposed on the Bill to 5 per cent, and introduce a digital content creation tax for non-⁠residents at 20 per cent. That we harmonise tax rates for sales promotion marketing, advertising services and digital content monetisation as per Clause C. Lastly, that the advance tax on trucks, prime movers and all those other equipment be amended by reducing the advance tax as proposed on the Bill from Ksh3,000 to Ksh2,500. With that, I beg to move.

Put the question.

Division!

Do we have the numbers, Serjeant-at-Arms?

There are numbers? Okay. We can ring the Bell for five minutes.

Order, Members. Stop ringing the Bell. Draw the Bar and close the door. Let us get Tellers for both sides. Two Tellers each from the Majority and Minority sides. Order, Hon. Members. We have the Tellers. We are ready for Division. Order, Hon. Members.

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Hon. Hillary Sigei, Member for Sirisia and Hon. Joshua Kandie, take your seats. Order, Hon. Members! Hon. Nimrod Mbai and Hon. Dorothy Muthoni, take your seats. Order, Hon. Members. We are ready for Division. The Bars are now drawn. The Tellers are here and the Door is closed. I will put the Question. We will call the names of Members in alphabetical order of their constituencies.

(Mathare, ODM)

Kwa niaba ya wanasanaa kutoka Mombasa ambao ni watoto mliwanyima kazi, na leo Zakayo anaingia kwa mifuko yao, mimi navote “No”.

Order, Members. This microphone is not audible. Hon. Members, take your seats. Hon. Masara, take your seat. Members at the Bar, take your seats. Mhe. Bedzimba, nangoja ukae chini . Hon. Ruku, take your seat.

Hon. Ruku, Hon. Kalasinga, Hon. Makali and Hon. Brighton Yegon, take your seats. Order Members! Hon. Sirma, take your seat. The results of the Division on Clause 24 are out. The numbers are as follows:

Ayes

Hon. Temporary Chairlady, I beg to report that the Committee of the whole House has considered the Finance Bill (National Assembly Bill No.14 of 2023) up to Clause 24 and its approval thereof with amendments and seek leave to sit again.

It is good to note that out of the 87 Clauses that have been proposed to be amended by the Departmental Committee on Finance and National Planning, we have now approved 24.

That is enough. You just report progress.

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Order Hon. Members. The House is still in session. Take your seats. Chair of the Committee.

Hon. Speaker, I beg to report that the Committee of the whole House has considered the Finance Bill (National Assembly Bill No.14 of 2023) up to Clause 24 and seeks leave to sit again today.

Mover.

Hon. Speaker, I beg to move that the House do agree with the Committee in the said Report. I request the Vice-Chairman, Hon. (Amb.) Lang’at, to second the Motion for agreement with the Report of the Committee of the whole House.

We have debated these matters extensively. We have considered 24 Clauses out of 87.

Hon. Lang’at. Ordinarily, you just bow.

(Ainamoi, UDA) seconded.

I have found that we have the requisite quorum. I will now put the Question.

Order, Hon. Members. For our colleagues who are probably first termers, we directed that we would sit up to midnight. You notice that it is now 12.45 a.m. This is not a violation of the Standing Orders. Standing Order 30(5) reads as follows: “(5) If at the time appointed for the interruption of business, a division is in progress or a question is being put from the Chair and a division results immediately thereon, such interruption shall be deferred until after the declaration of the numbers and the result of the division.” After midnight, if we were in division, even if you went on up to 4 a.m., it will remain legitimate.

Pardon? You had already done so? Thank you, Hon. Mbadi. Hon. Members, you may be upstanding.

The House stands adjourned today, 21st June 2023. It will resume its sittings later this morning at 9:30 a.m.

The House rose at 12.45 a.m.

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Clerk of the National Assembly Parliament Buildings Nairobi 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.