Decision to tax MPs dates back to 2006

Former Finance minister Amos Kimunya (centre) during the 2008 budget reading. He came under criticism in and outside Parliament over the plan to tax MPs. Photo/ FILE

Former Finance minister Amos Kimunya first announced plans to start taxing MPs’ salaries in 2006.

Little was, however, heard of the plans that would have added Sh600 million to the Exchequer until this year when the Kipipiri MP reintroduced the matter in Parliament.

The proposal, which also targeted other constitutional office holders’ salaries and allowances, was vehemently opposed by MPs led by Ikolomani’s Bonny Khalwale who said Mr Kimunya was “just playing to the gallery.”

Backing him

Mr Kimunya came under criticism in and outside Parliament over the issue, with only a handful of MPs and Prime Minister Raila Odinga backing him.

Coming at a time when MPs were angry with him over the sale of the Grand Regency Hotel, Mr Kimunya created more enemies by trying to interfere with their “golden egg.”

As a result, many saw the taxation plans as one of hidden reasons why MPs’ hurriedly moved to pass a vote of no-confidence in Mr Kimunya, forcing him to step aside as Finance minister.
Dr Khalwale, who moved the motion of no-confidence, said MPs will vote against the Bill in Parliament.

MPs earn more than Sh800,000 each a month, of which only their basic salary of Sh200,000 is taxed.

Tax bill

President Kibaki’s personal tax bill would have risen by Sh4.8 million a year if the move had become law. The President earns Sh2 million a month, which includes a taxed salary of Sh700,000 and allowances totalling Sh1.3 million which are not taxed.

All the President’s living costs, including food, servants, transport, housing, security, and medical expenses are paid by the taxpayer.

Vice-President Kalonzo Musyoka, whose allowances are the same as the President’s but whose salary is Sh400,000 less, was to pay additional taxes the same as the President’s. The Vice-President earns Sh300,000 in monthly salary and allowances totalling Sh1.3 million.

It is not clear how much the Prime Minister, whose salary and allowances are yet to be made public, was to pay.

Cars

Salaries and allowances paid to the Vice-President, Speaker, Deputy Speaker, ministers, Assistant ministers, the Government Chief Whip and Members of Parliament are done under the provisions of the National Assembly Remuneration (Amendment) Act, 2003.

Ministers earn a basic salary of Sh200,000, car maintenance allowance (Sh75,000), constituency allowance (Sh50,000), house allowance (Sh100,000), extraneous duty allowance (Sh66,667) and entertainment allowance (Sh80,000).They also pocket Sh200,000 in responsibility allowance and Sh366,000 for car maintenance.

As a result the Government was set to net nearly Sh145 million annually if the ministers’ allowances were taxed.

Assistant ministers on their part earn a total of Sh772,667 as allowances on top of their Sh200,000 basic salary, which means the Government could earn an average of Sh231,000 from every assistant minister monthly.

MPs earn a basic salary of Sh200,000, car allowance (Sh75,000), constituency allowance (Sh50,000), entertainment allowance (Sh60,000), extraneous allowance (Sh30,000), house allowance (Sh70,000) and car maintenance allowance (Sh366,000). Each MP would thus part with an average of Sh175,000 monthly.

Office holders

Mr Kimunya had proposed an amendment of the law to make allowances paid to MPs and constitutional office holders taxable.

The Attorney-General’s salary and allowances stand at Sh1.2 million a month, the Chief Justice and other judges’ salaries and allowances total Sh43 million a month and that of the Controller and Auditor General is Sh672,836.

The Public Service Commission chairman, deputy chairman and members salaries amount to Sh9 million monthly.