KRA vows to seize MPs properties

By John Njiraini and Martin Mutua

When ordinary Kenyans fail to pay tax on their incomes, Kenya Revenue Authority has one prescription — attachment of salaries and seizure

of propertyfor auction.

That was the reality hanging over MPs on Wednesday as KRA gave them a 30-day notice to declare and pay all amounts they owe since last September, or face punitive action. MPs pay some tax, which they peg on the mandatory deductions on the Sh200,000 they draw as salaries.

The difference — about Sh651,000 for each MP — is not taxed.MPs also draw other allowances like for commuting to their constituencies, which are not uniform because they are based on distance from Nairobi to the MP’s constituency, From KRA’s computations, each of the 220 MPs owes Sh3 million given

they were supposed to pay tax on their total earnings from last September – the month after the new Constitution was promulgated. Of the 222

members, only two voluntarily pay tax.KRA defied claims by MPs that taxes on their salaries should not be collected yet because their earnings

are tied up in loans and other commitments.They had wanted the tax order to apply to the next Parliament.

The MPs who fail to comply would be subjected to the embarrassment of KRA officers moving in to conduct formal assessments, and within 30

days force them to pay up, failing which Parliament would attach their assets.

Those supposed to comply include the President, the Prime Minister, the Vice-President, and Constitutional

office holders. Others are as the Attorney

General, Chief Justice, judges, and Auditor General, among others.

"Everybody must pay taxes. The law is on our side and only the courts can stop us from collecting tax from all State officers," declared John K Njiraini, KRA Commissioner of Domestic Taxes.

He added the taxman is supposed to collect Sh700 million from the 220 MPs, who have not been paying taxes after the due date was backdated to September, last year.

An MP earns a consolidated monthly pay of Sh851,000.

Of this, only Sh200,000 in basic salary is taxed, translating to Sh53, 000 in taxation.

When all the constitutional office holders are netted in the tax bracket, KRA expects to collect an extra Sh1 billion annually.

KRA has already written to the Treasury demanding taxes for State officers who are paid from the Consolidated Fund.

So far, the Judiciary has expressed willingness to co-operate with KRA, as the taxman claims taxes from high ranking judicial officers who were exempted in the old order.

Only Gatanga MP Peter Kenneth and Kangundo MP Johnstone Muthama have been paying tax.

Over the past few days, MPs have been up inarms after KRA instituted measures to begin taxing their allowances. Some declared they were heavily indebted and cannot pay.

Retrospective

On Wednesday, the BBC quoted House Speaker Kenneth Marende dismissing calls for MPs to pay tax on their perks inferring the law should not be applied

in retrospective.

"The basic concept of law is that once you confer a benefit, you don’t take it away arbitrarily," he said inLondon, where he is on official duty.

Mr Marende argued MPs were paying tax as provided for in law and that is what they will continue doing.

"My position is that as we speak now, Kenyan MPs pay tax as required," he added.

Acting Public Accounts Committee chairman Julius Kones said Justice Minister Mutula Kilonzo presented a legal opinion, which indicated MPs were exempted in the current Parliament.

"That opinion was reinforced by Attorney General Amos Wako in the presence of the President when we threatened to block the Budget and KRA boss tabled the letters, which I believe are in possession of the House Speaker," said Kones.

But the MP said it appeared KRA was out to "intimidate and harass" MPs.

"The KRA commissioner is behaving like an activist because even if it is a constitutional requirement, it is an issue that could be discussed and a mechanism found on how to go about it," he said.

"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 would be

among the first to comply," Mr Marende declared.Though the MPs have vigorously resisted any attempt to tax their allowances, the new Constitution demands all Kenyans share the tax burden.

Njiraini spoke at Times Towers, Nairobi.In the case of MPs, he said that besides the basic salary, allowances that include house allowance, entertainment, domestic servant, constituency,

parliamentary responsibility, extraneous duty and sitting allowances would be taxed.Also to be taxed is the Sh3.3 million MPs get at the beginning of every Parliament to buy fuel-guzzling cars.

Njiraini explained he expected the MPs to comply to avoid a situation where KRA would be forced to recover the money and enforce penalties. He said the taxman would not deal directly

with individuals MPs who fail to comply but through National Assembly – their employer.

Outstanding amounts

For those who refuse to comply, National Assembly would be required to recover the outstanding amounts and any penalties."Tax owed would be assessed on the basis of pay from the employer," said Njiraini.

He added the agreement reached by MPs and the President last year not to pay taxes until the life of current Parliament expires was basically the opinion of some Government bodies, but it was not binding.

The commissioner explained that in reaching the decision to force MPs and other State officers to pay tax, KRA is acting on the advice of the Constitution Implementation Commission (CIC).

"CIC advised us to tax MPs and we are proceeding based on their competent interpretation of the Constitution," said Njiraini.

He noted that those MPs complaining that KRA is infringing on their constitutional rights have the

liberty to go to the Supreme Court.

Agriculture Assistant Minister Gideon Ndambuki said Finance Minister Uhuru Kenyatta should state the correct position.

Water Minister Charity Ngilu said part of their remuneration is taxed and it should not be misconstrued that they don’t pay tax.

"The Constitution must be obeyed and anybody who does not pay is violating the law," said Muthama. Chepalungu MP Isaac Ruto said he was ready to pay tax since the Constitution was passed and it must be implemented.