What the MP's said regarding the taxation of their salaries

By Mzalendo reporter

Before his exit as the country's Finance minister, Amos Kimunya was a besieged man and not just because of the Grand Regency row, but because of his proposal that MPs allowances be taxed. Kimunya's proposal that the 222 legislators start paying tax on their allowances had not gone down well with them with several arguing that unlike other Kenyans whose salary is entirely used by themselves MPs have a responsibility to financially assist the electorate.
Kimunya's proposal was contained in the 2008/09 fiscal year budget and his exit as thetreasury's boss may have served as a reprieve to majority of legislators. A similar move by Kimunya during the 2007/08 fiscal year was shot down by legislators once it was brought to Parliament.

Currently, an MP earns a gross pay of Sh878, 000 per month. An MP's basic salary is Sh200, 000; a minimum commuted mileage of Sh75, 000; an entertainment allowance of Sh60, 000; an extraneous allowance pegged at Sh30, 000; a house allowance of Sh70, 000 and a motor vehicle fixed cost of Sh247, 000.

In addition, each Kenyan MP is entitled to a car grant of Sh3.3 million and an interest-free loan of sh8 million to buy a house.

Towards the end of the Ninth Parliament, the law-makers voted themselves a Sh1.5 million gratuity, making the Kenyan parliament probably the only institution in the world in which employees are paid both a gratuity and a pension. Under the present only, only the Sh300, 000 is taxable with the rest of monies being tax free.

This time round, Kimunya did not live to formally bring the proposal before the House floor for debate. But even before it was brought, MPs had their guns loaded, ready to shoot it down. Their sentiments during budget debate were straight to the point-"We cannot be taxed."

Kimunya's last words on the MPs taxation, June 26, during debate on budget:

"The other interesting item which I expect to get more comments on from honourable Members, as we discuss these tax proposals, is the issue that touches on all of us here, which is the taxation of the allowances that are paid to us as honourable members and constitutional office holders. In effect, we are saying that nobody in Kenya, from the President to the lowest paid public officer, will be exempted from the national duty of paying their taxes." Kimunya however was pushed out of office before he brought the proposal before the floor.
However, a considerable number of MPs aired their opposition to the proposal during their contribution on budget.

In the list of those who aired their opposition to the taxation measure include Charles Kilonzo (Yatta), Boni Khalwale (Ikolomani), Ephraim Maina (Mathira), George Nyamweya (nominated), Sospeter Ojaamong' (Amagoro), Danson Mungatana (Garsen), Soita Shitanda (Malava), Ali Hassan Joho (Hamisi), Charles Keter (Belgut), David Koech (Mosop), Fred Kapondi (Mt. Elgon) and Sammy Mwaita (Baringo Central).

The following are verbatim of some of MPs who either opposed or supported the taxation proposal as captured in the Parliament's Hansard.

Charles Kilonzo (Yatta) Opposed:

"When the Minister for Finance goes the other way round to say that he wants to tax allowances of honourable Members. A honourable member at the Constituency level is in charge of funerals, hospital bills, church Harambees and bursaries from his pocket because the money for bursary is not enough. He is the man who attends all Harambees. A Member of Parliament is like Robin Hood. You get it from the Government and, through yourself, you give it to the poor people. But who are the people in this Parliament who are saying that allowances should be taxed?"

Peter Kenneth MP for Gatanga and planning assistant minister: Opposed:

"I want to speak about an issue that, to me, looks like an issue that is being played to the public gallery. That is about the taxation of the allowances of Members of this House. Let it come! We do not have to make issues about it! I believe that most of the honourable Members here have become philanthropists in their own homes, and, probably, contribute more than the taxes that they are going to be taxed in their own constituencies! I know of honourable Members in this House, personally included, who spend all their salaries in their constituencies!"

Kenneth went ahead: "It has been said that it is high (MP's salary), and I agree with that. It is not subject to any increment in the five years that an honourable Member is seated here. It does not take care of the inflation costs that are rising in this country and you expect these honourable Members…… This is what the Minister should look at! He will do the taxation, but he will also face the same Parliamentary Service Commission saying that the cost of fuel is so much, the cost of living is so much, and he will have to review it."

Ephraim Maina (Mathira): Opposed:

"There is also the issue of taxing the salaries and allowances of honourable Members. Before I came to this House, I thought the salaries and allowances for Members of Parliament were just too much. Today, I know it is nothing because we spend all our salaries to meet the needs of our people. There is no need to expect us to do more than we are already doing."

He added: "Many Members of Parliament here know that the huge salaries that they are being said to be earning are just peanuts when you compare them with what we do. I can assure you that some of us have hardly put these salaries into our pockets since we came to this House, forget the money we spent earlier."

Orwa Ojode: Internal security assistant minister and MP for Ndhiwa: Said MPs should start paying taxes 2013.

"I had said clearly that Members of Parliament are not against paying taxes. We are going to pay taxes, but it is for the minister to tell us when we will start doing so. Is it today or tomorrow? Perhaps, the effective date of paying taxes will be in the year 2013. We are not saying that we will not pay taxes. This is because we also want our people to know that Parliamentarians are paying taxes on the Ksh200,000 we get as salary. Yes, we pay Kshs54, 000 and you know that, that amount is deducted from our salaries. So, we do not want this kind of popular politics. As leaders, we have unanimously agreed that were are going to pay taxes. In fact, it is just perception! We should not say that honourable Members are not paying taxes. We are paying taxes! The only tax that the Minister wants to levy on us is the amount of money he is giving us to fuel our vehicles. He should come out clearly and say. "Yes! My colleagues are paying taxes except on the money for fuel and entertainment."

Some of tax measure supporters as captured in the Hansard:

Yinda, Edwin Ochieng: MP for Alego:
"I would like to support the honourable minister on taxation by encouraging Members of Parliament to pay their dues. I think it is important that when ordinary Kenyans pay taxes without too much complaint, Members of Parliament should also lead be example by paying taxes on your allowances without too much shouting about it. I think many, or most, of the Members of Parliament are willing to support the paying of taxes.

Milly Odhiambo (nominated): supported:

"I know that there has been a lot of debate and discussions in the media in relation to taxation of MPs salaries. Personally, I am not opposed to it. However, as a Member of Parliament, when you are taxing my salary, I would want to see it being put to good use. I want to suggest very clearly to the Minister that part of the money that he propose to tax us, be put into construction of the Mbita Point-Homa Bay Road. Some of it should also go to orphans and vulnerable children."

David Ngugi: MP for Kinangop. Supported:

"It is very good for people to be able to finance their own activities. There is no other way that a Government can support its own activities other than through its citizens paying taxes. So, fundamentally, paying taxes is a noble thing, and it is everybody's duty, be they the President, Diplomats whom we have sent out there, people in the country, others in the diaspora and ourselves here in Parliament. So, as a matter of principle, I support that we all pay taxes."

Danson Mwakulegwa: MP for Voi. Supported:

"Kama vile wenzangu wanapendekeza tutozwe kodi, nakubaliana nao. Tikitozwa kodi, wananchi wengi watafurahi sana. Wabunge 222 wakitozwa kodi, hiyo ni Kshs800 milioni."

Ongoro: Assistant minister Nairobi Metropolitan Development and Kasarani MP. Supported:

"I do welcome the Minister's proposal to have honourable Members and constitutional office holders' allowances subjected to tax. It is my honest belief that we, as leaders, must lead by example. It we have to lead by example, we will lose all our moral authority if we refuse to pay our taxes. We will not have an opportunity to tell other Kenyans who are buying from the same supermarkets and who live in the same house to pay taxes from their meager earnings."

Johnson Muthama. MP for Kangundo; Supported:
"Juzi, Waziri wa Fedha alitoa mwelekeo wa kutaka kutuweka sisi pamoja na wananchi wengine. Mimi najua sitakuwa kipenzi cha wengi. Hata hivyo, mimi sikuchaguliwa kuwa kipenzi cha wengi. Ikiwa mwananchi wa kawaida ambaye ananunua soda dukani analipa kodi ama yule mwananchi wa kawaida ambaye anapata mshahara wa Ksh15,000 ama Ksh30,000 analipa kodi, mimi nataka kodi kabisa bila kuulizwa nitalipa na nani,"

He was however interrupted on a point of order by Ikolomani MP Bonny Khalwale: Opposed:

"Is honourable Member in order to suggest that the solution to the suffering of Kenyans is the taxation of the allowances of Members of Parliament when we know that the real problem is corruption? The honourable Member is one of the people who received Kshs40 million from Goldenberg and here he is pretending that he is so kind to members of the public. Is he in order?.

Shakeel Shabir: MP for Kisumu town East. Played a middle ground:
"I put to you that there are certain expenses that we, as politicians, and only as politicians, meet. These are wholly, exclusively and necessarily our expenses, be they on funerals, education or other things that we meet every day. The voice asking for taxation is right. We do not mind paying the tax, but you have to then realize that you must allow us to claim expenses against that taxation. We are prepared to give you voucher for this."

Linturi Mithika: MP for Igembe South: Said right Procedure must be followed.

"The remuneration of honourable Members is clearly set out by the Parliamentary Service Commission (PSC). The procedure under which honourable Members are remunerated is through a process that was started by a team led by Rtd. Justice Majid Cockar, which did the recommendations. The recommendations were taken and out into a Bill. I believe the best way to go about it is to follow the right procedure."

Though a sizeable number of MPs have publicly supported the taxation, the same legislators are likely to gang against the same proposal once it is brought to Parliament leaving the minister hapless.

This is what happened during the Ninth Parliament where by despite publicly supporting the move, the same MPs voted against it in the chambers, leaving the treasury toothless.

Posted by Mzalendo Editor on July 15, 2008

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