Why Raila, Musyimi paid Sh5.4m tax arrears

Prime Minister Raila Odinga and presidential hopeful Mutava Musyimi on Monday remitted Sh5.4 million in tax arrears to the taxman.

Mr Odinga’s outstanding tax bill was Sh3.392 million, while the Rev Musyimi paid Sh1.998 million.

They join MPs Peter Kenneth (Gatanga) and Johnstone Muthama (Kangundo) as the only lawmakers who pay tax on all their income.

Mr Kenneth and Mr Muthama have been paying tax since 2009.

“I have paid, because that is the law. The Constitution does not exempt anybody, let alone MPs, from paying taxes,” Mr Odinga said at a press conference in his office.

“The Constitution does not distinguish salary, allowances or other benefits.”

The Prime Minister, who is the supervisor and coordinator of government functions, then asked President Kibaki, Vice President Kalonzo, MPs and other constitutional office holders to pay up.

“It is imperative to note that nobody is above the law. Not the President. Not the Prime Minister. Not the Vice President. Not the MPs.

“We must follow the same law that everyone follows. All Kenyans, including some of the lowest paid househelps, labourers, factory workers and vendors, pay tax.

“Let us raise the confidence of the public in the wonder and promise of the new Constitution,” the PM said.

Public Service Minister Dalmas Otieno flanked the Prime Minister, but did not utter a word. The PM did not respond to a question whether Mr Otieno would also pay up.

Mr Odinga told his party MPs that payment of tax was not a “collective matter but an individual affair”.

Following the law

Mr Musyimi, who spoke at Parliament Buildings, said he was simply following the law.

“I felt deeply constrained to put this matter to bed. It’s a pity that the matter is taking too long for the discussions between Parliament and KRA to be concluded.

“I personally couldn’t wait much longer, I had agonised over this, maybe didn’t say much about it, but this whole discussion has not been easy since 2008 when we came here,” said Mr Musyimi.

He said he had written to the Clerk of the National Assembly, Mr Patrick Gichohi, authorising him to tax his pay beginning this July.

“This is to instruct you to charge tax on all my emoluments in accordance with the law with effect from July 2011,” read the one-paragraph letter copied to Kenya Revenue Authority Commissioner General Michael Waweru.

The PM said he was not party to the pre-referendum deal exempting MPs from paying tax.

“I was never in collusion with anybody to evade paying tax. I am doing what I consider to be in the best national interest. I was never in any pact with anybody,” Mr Odinga said.

However, he said KRA’s order had caught many MPs unawares, and challenged the lawmakers to “tighten the belt”. (READ: KRA issues tax warning to MPs)

“MPs don’t pay tax themselves. If the government (through the PSC) deducted the tax, no MP would have refused, because tax is deducted at source.

“Most of the time, and this is human, people assume that what you’re paid has the requisite taxes deducted.

“If you find so much money in the bank account, you assume that your employer did the right thing,” he said.

Mr Odinga asked the KRA to seal loopholes used by unscrupulous people to avoid paying taxes.

Other MPs who have backed the payment of tax include Martha Karua, Eugene Wamalwa, Kalonzo Musyoka, William Ruto, Musalia Mudavadi, Boni Khalwale, Wavinya Ndeti.

However, they asked KRA to reach a compromise with PSC on the arrears. The PSC is on the record dismissing the taxation orders.

House Speaker Kenneth Marende, PSC vice chairman Walter Nyambati and MPs Jamleck Kamau, Olago Aluoch, Joshua Kutuny, David Ngugi, Asman Kamama, John Mbadi lead the pack of those opposed to taxation, unless their salaries are increased.