Wednesday, November 12, 2008

Fury as MPs refuse to pay their taxes

Some of the leaders who have criticised the move by MPs to reject plans to tax their allowances. From left: COTU Sec-Gen Francis Atwoli, ex MP Paul Muite and Cardinal Njue. Photos/FILE. 

By NATION Team

Leaders reacted with fury on Wednesday after MPs blocked plans to make them pay tax on their generous perks.

Churches, NGOs, the International Commission of Jurists and the workers’ umbrella organisation, Cotu, described the move as selfish. They said MPs should take the lead in paying taxes.

Bishop Julius Kagwi of Mombasa Methodist Church called for mass action against the MPs to force them to pay their taxes.

Collect revenue

The outrage came after acting Finance minister John Michuki withdrew on Tuesday clauses in the Finance Bill, which would have made MPs and constitutional office holders pay tax.
He did so to secure MPs passing of taxation laws to allow the Government to collect revenue.

The proposal to tax MPs’ perks was made by former Finance minister Amos Kimunya in the Budget he read in June.

But MPs defended their decision to protect their allowances from being taxed. They accused the media of allegedly sensationalising the matter and said they already paid taxes amounting to Sh53,000 each month on their basic salaries, which stand at Sh200,000.

Two MPs — MPs Elias Mbau (Maragwa, PNU) and John Mbadi (Gwassi, ODM) — drew the attention of Deputy Speaker Farah Maalim to headlines in sections of the media.

But on Wednesday, Cotu secretary-general Francis Atwoli asked why MPs had arm-twisted the minister to withdraw the Kimunya proposal.

Mr Michuki’s agreement to withdraw the tax demand came after a closed door meeting with MPs, during which he is understood to have been told that the Bill would otherwise be blocked.

The churches spoke out under the umbrella of the Inter-Religious Forum, describing the MPs’ move as “selfish and inconsiderate”.

“They don’t know the pain the poor Kenyans go through while paying taxes so that they can earn their salary,” said the Rev Peter Karanja of the National Council of Churches of Kenya.

The leaders said all Kenyans should contribute to the day-to-day running of the Government, and therefore paying tax was a must for all.

Big spenders

“The MPs are holders of constitutional offices, which are big spenders of tax money, and they should contribute to the same,” the Rev Karanja said.

The churches called for an independent body to be made responsible for dealing with MPs’ pay and perks and to suggest how they should be taxed.

Among those present were Presbyterian Church of East Africa Moderator the Rev Dr David Gathii, Fr Vincent Wambugu of Kenya Episcopal Conference, Prof Abdul Busaidi of Supreme Council of Kenya Muslims, Mr Rashmin Chitnis who represented the Hindu Council of Kenya and Dr Willy Mutiso of Evangelical Alliance of Kenya.

John Cardinal Njue supported the stand taken by the Inter-Religious Forum.

The National Council of NGOs said: “Kenyans expected the members of the 10th Parliament to lead by example. All citizens should be taxed equally. It is a big shame for them not to pay taxes, yet they are the ones benefiting from tax money.”

The council’s finance and administration manager, Mr Ochieng Olendo, proposed that the role to determine MPs’ salaries and allowances be given to an independent body. The body should have members from outside Parliament.

“It should also take over the role played by Parliamentary Select Committees and should be set up immediately as part of constitutional reforms,” the statement said.

The ICJ programme officer, Ms Priscilla Nyokabi, who was also outraged by the move, said that it is a civil duty for every Kenyan to pay taxes. “The constitution should be amended for all constitutional office holders to pay taxes,” she said.

Cotu’s Atwoli asked: “Where do the MPs draw their moral obligation from to lead people if they cannot pay taxes?” He said it is a shame for MPs to pocket hefty untaxed salaries, leaving workers, farmers and the jobless to bear the tax burden.

Former Kabete MP Paul Muite said the public has been in favour of MPs paying taxes adding, “it is for the MPs then to take into account the public sentiments on the issue.”

Meanwhile, the Judiciary was in a dilemma on whether to continue taxing judges following the withdrawal of the proposal since judges are also constitutional office holders.

Sources at the Judiciary said after the withdrawal of the proposal, they expect judges to be given back the money they have been deducted in taxes since September.

The source, who did not want to be named, said the Judiciary is waiting for official communication from the head of Public Service, Mr Francis Muthaura.

Following the deductions, judges have parted with between Sh70,000 and Sh90,000 individually to the taxman. A High Court judge normally earns Sh300,000 a month while their counterparts at the Court of Appeal take home Sh500,000.

Speaking from Mombasa, Bishop Kagwi urged Kenyans to hold peaceful demonstrations against MPs. He said he did not understand why MPs do not want to pay taxes whereas hawkers who earn less than Sh100 per day are taxpayers.

“It is sad that MPs who earn more Sh800,000 per month want to be exempted from paying tax whereas some Kenyans living below US$1 per day are taxed. It is time our MPs stopped fighting for their stomachs and be counted as contributors to the Exchequer,” the bishop said.

ACK Bishop of Mombasa Julius Kalu termed the withdrawal of taxing of MPs ‘unfair’, as it demoralised low income earners.

Quite unfair

“Such an attitude demonstrates our MPs do not have the interest of the people they serve,” Bishop Kalu said.

The Council of Imams and Preachers of Kenya organising secretary Sheikh Mohamed Khalifa said they had expected the MPs to turn down the tax proposal.

By Muchemi Wachira, Bornice Biomndo, Jillo Kadida and Mathias Ringa

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