from Judy Miriga

Folks,

Tax is a must that all MPs must pay as equal partners in sharing the burden of the debt. It is a shared commitment to all salary earners irrespective of position in the society.

Taxes are the collectibles made through Revenue Collections that helps with Government functions and operations in meeting expenses and costs of bills, salaries, transportation and other Government activities along with boosting social welfare for community programs and in management for infrastructures.

In situations where there is relatively good regulatory program put in place with balanced effective management system, it is not worth that Revenue collection would suffice to boost economic development as well as social programs without heavy borrowing and overburdening the society with undue rising high costs for consumer basic needs and other commodities.

In a shared-cost tax-payer bracket, rich and poor, employers and employees, high salary and low salaried earners, business community, service providers and or commodities traders or hawkers, investors of land and property dealers, must have a taxable salary bracket that which conforms in a balanced proportion that fits well inclusively.

Where MPs begin to brag and order People, in their selfish demands to raise their salaries to the ceiling, and stubbornly refusing to pay income and property taxes, but are full of themselves with threats to paralyse the house, is a show-case of performing evaluation, which, according to the New Constitution, the performing deliberations and recommendations are summarily reasons enough for recall and equally satisfactory to have a Members’ term of office terminated from serving in the House, cutting short his or her term of office in Parliament.

This is something People Power MUST confront and engage Parliamentarians in order to weed-out those who are hell-bent to delaying tactics so matters get to a state they are overcome by events, and so that they evade Implementation of the New Constitution.

It is not a secret that they are all ready to go to election with the old constitution, and this will never ever happen……….They are in a deep dream land……

I therefore register my disappointment and disagreement with Speaker Marende in siding with these unthoughtful crooked Politicians, who have lost focus for better things in Democratic Governance of the people and for the people…….

People…..We must succeed…… United we are strong, divided we fall……..take the Bull by the horn, and show your People Power, a force that which will shape our destiny for a better world now and forever………!

You will sigh and be satisfied, it is a risk worth taking………!

Cheers everybody, and God Bless us all……

Judy Miriga
Diaspora Spokesperson
Executive Director
Confederation Council Foundation for Africa Inc.,
USA
http://socioeconomicforum50.blogspot.com

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MPs: We’ll paralyse House if taxman pushes us to the wall

By MARTIN MUTUA

Parliament hit back at Kenya Revenue Authority (KRA) terming threats to seize MPs’ property for not paying tax as “mischievous and malicious”.

The Parliamentary Service Commission (PSC) said remarks by KRA Commissioner John Njiraini were meant to incite Kenyans against MPs.

PSC Vice-Chairman Walter Nyambati said the current Parliament is safeguarded under the old Constitution.

“For MPs in this Parliament, the law to be applied is under the former Constitution. This includes the exemption from taxation of allowances,” he said.

Impeccable sources told The Standard that MPs are now planning to paralyse business in the House when it reconvenes next month until the matter is resolved.

Several MPs interviewed but who did not wish to be named said no Government business would be transacted in the House until the matter is dealt with.

“Unless there is something we don’t know, the feeling among members is that no Government business would be transacted, including the Budget, which is yet to be approved by the House,” said an MP.

Members have also vowed that if pushed to the wall, they would reintroduce the Akiwumi Tribunal report that proposed their remuneration to be increased to meet the tax deficit that KRA is demanding.

In the report pending before the House, the tribunal had recommended that the Prime Minister should earn 80 per cent of the gross remuneration of the President.

It had also suggested that the Vice- President earn 60 per cent of the gross remuneration of the President and the Deputy Prime Ministers earn 60 per cent of the gross remuneration of the PM.

The tribunal further recommended that the Speaker should earn 50 per cent of the gross remuneration of the President, while his deputy earn 70 per cent of the Speaker’s gross remuneration. Similarly, the report said the vice-chairman of PSC should earn a parliamentary responsibility allowance.

The PM’s salary was recommended at Sh2.9 million a month, the VP’s Sh2.19 million, the Speaker Sh2.1 million, Deputy Prime Ministers Sh1.6 million, and the Deputy Speaker Sh1.4 million. Assistant ministers, Government chief whips and members of the Speaker’s panel were to earn Sh1.3 million, while MPs were to earn Sh1.09 million.

Nyambati, in the company of MPs Olago-Aluoch and Jamleck Kamau, said the taxation of MPs’ allowances was the subject of two Speaker’s kamukunjis last year just before the referendum on the Constitution.

Nyambati said in the first kamukunji, Attorney General Amos Wako told MPs that taxation of their allowances was shelved until the expiry of the Tenth Parliament.

“In the second kamukunji, the President assured MPs the Government shall abide by the legal opinion of the Attorney General,” he added.

Olago said the Speaker was in possession of the letters by Wako and KRA Commissioner General Michael Waweru. “When the Speaker produces the letters, then it will be out in the public for Kenyans to judge,” he added.

We Will Not Pay a Penny, Swear MPs in Tax Row
Alphonce Shiundu
23 June 2011

Nairobi — Members of Parliament were on Thursday adamant that they would not obey demands by Kenya Revenue Authority to pay tax on their full Sh850,000 salary.
Furious MPs described KRA officials as “uncivilised” and quoted sections of the law they claimed supported their right not to pay taxes like other Kenyans.

They dismissed the Commission on the Implementation of the Constitution as having “no role in interpreting the constitution”. MPs refusal comes even as the Judiciary, which is also affected by the new law, has agreed to comply, and has asked Treasury to help its members, including judges and the Chief Justice to obey the Constitution.

The CIC had said that MPs must pay their bit. Many institutions, including political parties to which the MPs belong, have been referring matters of constitutional interpretation to the CIC.

The Constitution is unambiguous: all state officers, including MPs and holders of constitutional office, must pay taxes. The Constitution actually bars Parliament from making a law that exempts anyone from paying tax.

Speaker Kenneth Marende, admonishing Finance Minister Uhuru Kenyatta for not following the Constitution, recently ruled that unless expressly suspended in the transitional clauses, a section of the Constitution is assumed to be in force and must be obeyed.

It now remains to be seen whether Parliament will change its understanding of the Constitution to accommodate the MPs’ demands.

MPs have been arguing that the status quo should be maintained until after the next election on the basis of a legal opinion by the Attorney-General last July that they will not be taxed until the end of their term.

KRA has dismissed the AG’s opinion as the views of one State department, and has threatened to auction MPs’ property and raid their accounts if they don’t pay their taxes with arrears.

It is highly unlikely, in the event of a lawsuit that judges will agree to be taxed but make an exception of MPs.

Yesterday, the Parliamentary Service Commission (PSC) — the administrative wing of the House — defended MPs, saying they will not pay tax until the law is reviewed.
Mr Walter Nyambati, the vice-chairman of the PSC and MPs Olago Aluoch and Jamleck Kamau, both members of the commission, also accused the taxman of malice and mischief, for publicly demanding that they pay up.

Mischievous

“(The commissioner of domestic taxes, Mr John) Njiraini, is being mischievous and malicious. This is one arm of government. KRA has not instituted any discussion with the Parliamentary Service Commission. They’re inciting the public against their Parliament. It is wrong. Totally wrong,” Mr Nyambati said.

They said PSC had initiated talks with the KRA, the Treasury and Attorney General Amos Wako, with a view to having the directive rescinded.

And separately, Kinangop MP David Ngugi accused the Government of sparking the storm over MPs taxation as a “diversionary tactic.”

“These are MPs with kneejerk reaction. I repeat this is nonsense. It should not be mentioned. We should be going by the law, and so far the law is on the on the side of MPs. It would be reckless,” Mr Aluoch said.

The PSC commissioners fell back on what it termed as the “opinion of the Attorney General” issued last July, just before the referendum on the Constitution, saying that the KRA can’t tax them both “in law and in fact”.

Mr Kamau said the President and the AG, “unless they were not being genuine”, promised to abide by the opinion and protect MP’s tax free allowances until their term in Parliament ends.

While, they noted that the AG’s opinion cannot be superior to the Constitution, they said it was based on law and that anyone with a problem should go to the Supreme Court for interpretation.

They then cited Section 6 of the Sixth Schedule, which says the rights and obligations that were enjoyed under the old Constitution shall be enjoyed in the transition period.
They argued that their obligation was to pay tax, while the government’s was to collect tax. However, they said, it was a right under the “laws of natural justice and principle of reasonable expectation” for them to enjoy their tax-free perks totalling Sh651,000. They just pay tax on their Sh200,000 basic salary.

“You cannot change the terms of an employee’s contract midway, before the term ends. Full stop! People are arguing based on emotion rather than fact and truth,” Mr Aluoch said. The MP for Kisumu Town West quoted the Income Tax Act, saying, there was a provision to cater for such situations because there is a discrepancy in the law. Under this law, the Finance Minister can also direct the commissioner to collect tax from MPs.

They said that once the Speaker comes back from his international trip, the AG’s opinion and the letter from the KRA will be made public and that the status quo will remain.
“Under the legal principle of Estoppel, he cannot go back to say that he’s changed his mind,” Mr Aluoch said of the AG.

He said the Commission for the Implementation of the Constitution had no role in interpreting the law.

The tax exemption on MPs’ perks was first introduced in law in 1975. The current pay was set in 2003 after a report by a tribunal by former judge Majid Cockar.

Marende Dismisses MPs Call to Pay Tax
Alphonce Shiundu and Njeri Rugene
22 June 2011

Nairobi — 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.

MPs Owe KRA 700 Million Shillings
Fred Indimuli
22 June 2011

The revenue authority could in the next two months start recovering taxes owed by MPs including from their bank accounts.

John Njiriaini, commissioner domestic taxes department, says they have issued demands to the MPs for self declaration which should be returned in 30 days failure to which KRA will begin recovering the money in another 30 days.

KRA says MPs owe it 700 million shillings in unpaid taxes excluding penalties calculated from when the new constitution was promulgated. KRA is also expecting taxes from another 11 constitutional offices including that of the President, vice president and the Judiciary.

MPs May Lose Assets Over Tax Arrears
Samwel Kumba
22 June 2011

Nairobi — The Kenya Revenue Authority will auction the property of MPs and other top government officials if they don’t pay their taxes.

Their bank accounts could also be seized and money recovered.

The no-nonsense position taken by the taxman means that the tax-free existence that MPs have fought so hard to keep is almost coming to an end.

MPs’ tax holiday, through which they pay income tax on only Sh200,000 of their Sh850,000 salaries, is hugely unpopular with the public.

Other public officials who are joining the ranks of taxpayers include the Attorney General, judges, Controller and Auditor General, chairman and members of the Public Service Commission and Interim Independent Electoral Commission chairman and commissioners.

The Constitution explicitly provides that no public official is to be exempted from paying taxes. From the moment it became law on August 27 last year, the incomes of constitutional office holders became taxable.

KRA has given the affected officials, and their employers, until mid-July to pay up. If they don’t, enforcement measures will be taken to recover the money, warned Mr John Njiraini, the Commissioner for Domestic Taxes.

The taxman, however, said he did not expect matters to degenerate to that level. “The other measures we have to recover the money include doing so through the affected person’s bank accounts. But we hope for an amicable solution to this,” he said.

Deputy Speaker Farah Maalim supported the decision to demand the taxes. “MPs have no choice but to pay taxes… the law is very clear. It does not exempt them from paying taxes,” he said in Nairobi on Wednesday.

The Judiciary is already in touch with KRA and has asked to be guided to comply with the law. “We expect Parliament and the other relevant authorities to respond to our demands the soonest possible,” said Mr Njiraini.

KRA is challenging MPs who are unhappy with its interpretation of the law to go to the Supreme Court.

MPs have been arguing that taxing them would cut their pay in violation of their employment contract with the public.

They also say that they have obligations such as loans and mortgages, which they took on the basis of their full untaxed pay.

Only two MPs have been paying tax — Mr Peter Kenneth and Mr Johnstone Muthama — while the rest have only been paying tax on their basic salary of nearly Sh200,000.

In total, KRA expects to collect Sh700 million excluding penalty as the accrued tax and going forward nearly Sh1 billion every year from MPs and the 11 constitutional offices.
MPs’ taxable monthly perks include responsibility, constituency, extraneous, entertainment, sitting and the Sh336,000 for owning a car.

“Even the motor vehicle purchase allowance of Sh3.3 million will now be subjected to taxation,” said Mr Njiraini.

In July last year, Attorney General Amos Wako told MPs that under the new Constitution they would not be expected to pay taxes until the end of their term in office as they were exempted under the transitional clauses.

Mr Njiraini on Wednesday said that after consultation with Constitution Implementation Commission (CIC), they agreed that Article 210 of the Constitution was not subject to deferral despite the AG’s earlier opinion.

CIC chairman Charles Nyachae has supported the decision to immediately tax MPs and other constitutional office bearers. (READ: Nyachae backs MPs tax move)

In CIC’s view, the section on the taxation of MPs became operational the moment the Constitution came into force.

“There are many state officers. It is not just MPs. They all have to pay tax as none of them shall be exempted.

“The opinion of a State department is not superior to an interpretation by an institution mandated to oversee the implementation of the new constitution,” said Mr Njiraini.

The MPs may have been told what they wanted to hear at the time to gain their support at the referendum after some of them threatened to oppose the Constitution if they were to be taxed thereafter.

Early this month KRA wrote to Treasury – which runs the kitty from which most constitution office holders are paid – asking it to tax the salaries of the officers.

I Can Imagine Why we have such a headache………!

MP’s Certificate a Forgery, Court Told
Richard Munguti
24 June 2011

Nairobi — A school certificate said to belong to Gatundu North MP Clement Waibara is a forgery.

Principal secretary in charge of archives at the Kenya National Examinations Council (Knec) Patrick Ng’ang’a Miano said the certificate produced in court by former assistant minister Patrick Muiruri was not in their possession.

“The certificate shown to me by lawyer Evans Ondieki for the MP is a forgery. It did not emanate from Gikindu Primary School whose results I have with where Mr Waibara allegedly attended his early education,” Mr Miano told Justice Fred Ochieng.

He said the index number of Mr Waibara in the certificate produced in court did not tally with the records at the examinations council.

“The index number in the Knec’s record is 25624/075,” Mr Miano said.

He read out the index number in the certificate produced in court as 25624/070.

The exhibit produced by Mr Muiruri bore the name of Mr Waibara. It was issued by Gikindu Primary School in Gatundu North constituency.

Mr Miano was testifying in a case in which Mr Bernard Chege Mburu has challenged the MP’s election. He is asking the court to nullify the MP’s election, saying the polling rules were violated.

But Mr Miano found himself in a tight spot when lawyer Muthomi Thiankolu pointed out to the court that the records produced in court by Mr Miano were from a school in Murang’a District.

“The records being relied upon by the Knec officer are from a different school and belongs to a different student. The student’s index number is 075 while the one produced by Mr Muiruri is 070,” Mr Thiankolu said.

He said there were many schools with the same name in Murang’a and Kiambu.