Marende dismisses MPs call to pay tax
House Speaker Kenneth Marende has dismissed calls for MPs to pay tax on their perks.
With the move, Mr Marende has effectively shrugged off the taxman’s directive that the lawmakers and other constitutional office holders pay tax.
Mr Marende’s stance is the strongest indication that MPs will not yield to public pressure in respect to the Constitution in the remitting of tax.
“The basic concept of law is that once you confer a benefit, you don’t take it away arbitrarily,” he said in London, where he is on official duty.
In an interview with the BBC, Mr Marende said MPs were paying tax as the law requires.
“My position is that as we speak now, Kenyan MPs pay tax as required by enabling tax laws,” he said.
The lawmakers pay taxes on their basic salary of Sh200,000, but their perks amounting to a minimum of Sh651,000 remain untaxed –and they are keen to maintain that status quo at least until after the next elections.
“If the law says Mr Speaker you earn Sh800,000 a month; you are supposed to pay tax on all the Sh800,000. I can assure you that I will be among the first to comply,” Mr Marende told the BBC.
It is not clear which law the Speaker was referring to, given that the Commission for the Implementation of the Constitution –the custodians of the new dispensation—has said that the Constitution, being the supreme law of the land, requires every State officer, including MPs, to pay tax.
The National Assembly Remuneration Act, which exempts MPs from paying income tax on their huge perks, according to the CIC is inconsistent with the Constitution and therefore it is null and void.
He said it was not for him as the Speaker to introduce amendments to have the lawmakers comply with section 210(3) of the Constitution.
He said if the amendments are brought and approved by Parliament “then there’ll be compliance.”
Asked about his moral views, the Speaker replied: “If you talk about morals, my position is very simple. And it is clear. I do everything in accordance with the law as prescribed. Even as a good Christian, the bible says give unto Caesar what belongs to Caesar.”
The contention is that MPs have so far not been giving as much to Caesar, given that they engineered the move to block their perks from taxation. That move to shield allowances was enacted by President Kibaki when he was Finance minister under the Moi Government.
The Speaker’s latest position comes at a time when differences have arisen over interpretation of the law as to the taxation of MPs allowances.
While the CIC boss Charles Nyachae is of the view that the Constitution directs everyone to pay tax, Justice and Constitutional affairs minister Mutula Kilonzo says the law is not that clear.
Mr Kilonzo says that while “it is fair to argue that Article 210 of the Constitution binds everyone to pay tax,’’ the use of the word “may” in the article about no law exempting any State Officer from paying tax, creates a discretion.
Similarly, he argues that 210 (2) also allows a discretion for a waiver of tax in the case of another legislation.
He argues that ‘If” is the “significant word”.
In this case, the minister says, it can be argued that the National Assembly Powers and Privileges Act could be the law contemplated by the provision.
“If that is what the Kenya Revenue Authority is using, then they must understand that the article creates discretion on Parliament to exclude or authorize State Officers from paying taxes (on their allowances),” he said.
Mr Kilonzo, a Senior Counsel also brings in another argument. Are ministers and Members of Parliament State Officers in the transition period? If indeed they are, would they be holding political party offices?
He bases this on Article 3(2) of Schedule Six which extends the provisions of the old constitution stating that the National Accord and Reconciliation Act which forms the Coalition government is still in operation until after the next elections to be held under the current Constitution.
“The current government which includes MPs is formed under the Accord, to what extent does the KRA letter reflect the value and efficacy of the National Reconciliation Act?’’ he posed in an interview with the Nation.
However, he urges that the KRA letter “should not be dismissed lightly because Article 12 in which Article 210 falls is in full force.’’
But again, MPs salaries are presently defined in Section 45B of the old constitution --on the powers of the Parliamentary Service Commission-- which is still in force, Mr Kilonzo said.
“I want to entertain a sober interpretation of these provisions and also invite Kenyans who are aggrieved to go to the Supreme Court once the Judges are sworn in, for interpretation. My ministry will gladly abide by the ruling of this wonderful court,’’ he added.
However, he was quick to defend MPs against allegations that they have violated the Constitution by failing to pay taxes on their full because the legislation that allows them not is in force.
“I would also like to see the wording in that letter to see how it varies from the one (the letter from Finance which is said to be with the Speaker) presented to Parliament,’’ the minister said.
Kenyan MPs are among the highest paid lawmakers in Africa.
