MPs vow to shoot down tax Bill over perks

Members of Parliament have vowed to cripple the government’s push to collect taxes until the President approves the controversial Sh9.3 million gratuity due to each of them.

Top of the lawmakers’ list is to frustrate the Value-Added Tax Bill, which is pending in the House. The Bill is a key priority in Kenya’s relationship with the Bretton Woods institutions — the International Monetary Fund and the World Bank.

The Bill is meant to bring reforms in the collection of VAT, and is expected to hugely boost tax collection. It has been at the centre of talks between the Treasury and the IMF.

Besides, the MPs have been quietly scheming to raise the 65-per cent quorum required to veto the presidential memorandum which rejected their approved severance package.

As per the Sixth Schedule in the Constitution, 145 MPs will be enough to force President Kibaki to give in to the House resolutions.

The lawmakers are also mulling censure of the Finance Minister Njeru Githae, because, they say, he had duped the House into believing that President Kibaki had approved their gratuity, only for the Head of State to turn around and label the amount “unaffordable and unconstitutional” when he refused to assent to the Finance Bill, 2012.

The MPs were taken aback by the President’s decision, because, in the history of Kenya’s Parliament, no Head of State has ever refused to assent to the Finance Bill – which legalises the tax measures and gives the taxman authority to collect the taxes. (READ: Kibaki rejects MPs’ Sh2bn send-off pay)

They are still petrified as to how the President could refuse to sign a Bill to okay the tax measures that would have boosted government revenues by Sh40 billion, because MPs had sneaked in a clause to get Sh2 billion in severance package.

If push comes to shove, the Parliamentary Service Commission is also keen on taking the matter to court to ensure they get the money in January.

There’s a pending case regarding a similar amendment in which MPs, in April, introduced the gratuity – calculated at 31 per cent of basic salary for every year worked, coming to a total of Sh3.72 million – and scrapped the “winding-up allowance” which was a total of Sh1.5 million, paid at the end of five years. The PSC is keen to win the case, which was filed by Mars Group.

MPs who spoke to the Sunday Nation off-the-record – because of the public outrage over the decision to raise the gratuity, and the attendant risk of being outed for dismissal at the March 4, 2012 General Election – said the fight for the Sh2.1 billion send-off package had just began.

Mr Charles Onyancha (Bonchari) gave the country a peek at the thinking of the lawmakers when he asked the Treasury to disclose the pay package of the constitutional commissioners. Mr Onyacha said MPs were justified in seeking the gratuity because they were “on duty 24 hours, with no weekends”.

The lawmakers are taking cue from the teachers, lecturers and doctors, who, after going on strike and getting ‘the government has no money’ refrain from the Treasury, finally got their way and got paid.

Dr Oburu Oginga, the Finance assistant minister, had a tough time with the lawmakers because they sought to know why some of the commissioners earned colossal pay, whereas “they have no work”. The MPs singled out the chairman of the Commission for the Implementation of the Constitution.

The vice chairman of the PSC, Mr Adan Keynan (Wajir West) also let the public know that MPs were not going to budge. He accused the Executive of “playing politics with the image of the MPs”.

“I want Kenyans to hear that the amendment that I moved was approved by the Minister for Finance, (Mr) Githae. He had the amendment for four days, which means that he must have had the approval of none other than His Excellency the President,” said Mr Keynan.

“It was not my own amendment. When Mr Githae gave it to me and said: “Here, it is. It is approved. Go ahead and move it”, my assumption was, since the amendment had financial implications, His Excellency the President had consented to it. I only did what I was asked to do.”

But that proved a hard-sell because the Deputy Leader of Government Business, Mr Amos Kimunya, who is also in President Kibaki’s kitchen Cabinet, said the President had no idea that MPs wanted the computation of their gratuity pegged on their gross income.

Mr Kimunya said the matter was a private discussion between Mr Keynan and Mr Githae, and not the position of the Executive. “I am very sure that the President was not aware of it,” said Mr Kimunya.

But in a statement sent to Sunday Nation, presidential aspirant Peter Kenneth has condemned the move by MPs terming it “highly insensitive”.

The Gatanga MP said he was away when the MPs undertook the action that was met with strong opposition as hundreds of Kenyans moved from the social media to the streets to protest against the move.

“It is highly insensitive coming hot on the heels of an equally ill-advised increase for senior civil servants immediately following weeks of crippling strikes by teachers, lecturers and doctors that resulted in much suffering for the public,” he said.

“It is most unfortunate that Parliament now wants to challenge the President on the issue. You can rest assured that I will not be part of the MPs taking on the President; I am and will remain on the side of Kenyans.”

Rejected salaries

The MPs are bitter that most of the commissioners in constitutional commissions earn more than them, yet it is the MPs who vetted and approved their appointment.

They said that the CIC commissioners had rejected salaries of Sh400,000, and arm-twisted the Treasury into paying the chairman Sh1.24 million.

The Finance minister, while appearing before the Finance Committee of the House, just days before the MPs put in the proposal to increase their severance package, had complained that the country’s wage bill was rising due to the demands for huge salaries from the commissioners.