MPs sneaked law to evade paying Sh1.4b tax, lawyer tells court

Parliament session during a Special Parliamentary Sitting. [Elvis Ogina, Standard] A battle to force Members of Parliament to pay Sh1.04 billion tax waived for their cars has landed in court. Lawyer Roy Mwamba, in his case before the High Court, said that MPs sneaked in a law shielding themselves from paying taxes to beat a judgment requiring each of the 349 National Assembly members and 67 Senators to pay Kenya Revenue Authority Sh2.5 million, which is part of the car grant issued to them. According to him, instead of appealing the Tax Appeals Tribunal's decision in 2023, the MPs inserted changes to the tax law to avoid paying Sh1.04 billion. He said the MPs sneaked amendments to Section 5 of the Income Tax Act, which went unnoticed by Kenyans. The Court heard President William Ruto assented the bill into the Tax Laws (Amendment) Act, 2024, on December 11, 2024. Mwamba told the court that the net effect was that what the President signed into law was not what Parliament sent to Kenyans for public participation. "It is in the public interest this amendment borne of a moral hazard, and self-dealing doesn't result in the loss of tax revenue from the untaxed income by individuals in the course of the employment as state officers in a state office in direct violation of the constitution," claimed Mwamba. He said that MPs passed the amendment to the Income Tax Act by adding Section 5(4)(fa). The lawyer further said that the import of the amendment was that all MPs would enjoy tax-free vehicles. According to the lawyer, they further aggravated the taxpayers' injuries by backdating the section's effective date to July 2022. The lawyer said that MPs crafted a law that ensures they enjoy tax-free assets purchased during their tenure in office and are reimbursed for any expenditures incurred during the performance of their duty. Through a gazette notice published on July 27, 2022, the Salaries and Remuneration Commission reviewed the Speakers, Deputy Speakers and MPs' Motor Vehicle reimbursements payable once in a Parliamentary term. The notice provided a Sh7.75 million reimbursement for MPs to buy a car with a maximum capacity of 3000 cc. According to SRC, the amount would be paid once. According to him, speakers, deputies, and MPs register the vehicles in their names and have complete control during their term, but they can sell them if they do not return or serve a new term. According to him, it is illegal for them to make private personal gains as public assets arepassing into their hands unlawfully. "When statutes are enacted for the private benefit of Members of Parliament and public officers, not only is the rule of law undermined, but also it amounts to spittle on the face of Kenyans and their constitution. Some of the best paid legislators worldwide, when isenough, enough?" he paused. At the same time, he said that MPS had also deliberately crafted a law to enable them to avoid paying taxes. The lawyer argued that it led to a loss of tax revenue. "A moral hazard that is explicitly injuncted by articles 116 and 210. Violations even a school boy or girl would identify, but greed is the worst form of blindness, greed in passing off of public assets to private hands without taxation, as pleaded earlier is triple satanic considering the morality underpinning fidelity in public administration and guarding public resources from blatant waste," argued Mwamba. He wants the court to declare the section unconstitutional. At the same time, Mwmba is asking the court to force KRA to collect all taxes owed by speakers, their deputies, and MPs.

MPs sneaked law to evade paying Sh1.4b tax, lawyer tells court

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MPs sneaked law to evade paying Sh1.4b tax, lawyer tells court

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