After taxes, will Kenyan MPs now defy death?

Sunday June 26 2011

True to form, Kenya’s Members of Parliament have reacted to the revenue authority’s demand that they pay taxes with threats and blackmail.

They have introduced politics into the clear requirement of the new Constitution that all state officers, including MPs and holders of constitutional office, pay taxes.  The MPs are not going to be able to wriggle out of this one, despite their threats to paralyse parliament and derail legislation for the implementation of the Constitution.

What is the basis for this bluster? An assurance by the president and the attorney-general that they would not be taxed until the end of their term.  Kenyan MPs have enjoyed tax exemption on their perks since 1975 when the law was changed, ostensibly in order to avoid bias when the House was looking at pivotal economic issues such as deciding on taxation rates. But Kenya has since moved on and MPs since 2003 have been increasing their salaries and allowances while the rest of Kenyans bear the brunt of inflation.

In neighbouring Uganda and Tanzania, MPs are taxed only on basic salary and not allowances — just like their Kenyan counterparts. But Rwanda MPs must pay taxes on their gross pay and are allowed only one perk — duty free car imports. Burundi MPs too pay taxes like ordinary mortals.

The demand by the Kenya Revenue Authority on Kenyan MPs to pay tax on their full Ksh850,000 ($9,444) salary appears to have confused the House. Minister for Constitutional Affairs, Mutula Kilonzo, is making matters worse by arguing that MPs should not be intimidated at this crucial time as he needs them to pass the legislation for the implementation of the new Constitution.