Githae raids taxpayers to settle MPs’ tax debts

The Treasury has once again picked the pockets of the taxpayer to pay the MPs even as questions remain as to whether any agency, other than the Salaries and Remuneration Commission (SRC), can determine the benefits that public officers get for serving in government.

Finance minister Njeru Githae has provided a Sh4.7 billion grant to the three arms of government to settle tax arrears that MPs, judicial officers and military personnel owe the taxman since the coming into force of the new Constitution in August 2010.

The money is to be disbursed to the Parliamentary Service Commission, Judicial Service Commission and to the Kenya Defence Forces to pay MPs, judges and the military’s taxes and bring them into compliance with the Constitution’s requirement that all State officers pay taxes.

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Though neutral to the government’s finances (because the money immediately returns to the Treasury as tax revenues) the decision is mainly seen as the MPs’ final effort to shield themselves from any exposure to legal challenge for their refusal to pay taxes.

It was expected that the majority of MPs, who have refused to pay taxes as provided for in the Constitution, would meet their fate at the end of their term when non-compliance with the tax law would block them from running for public office in the next election.

That loophole has now been effectively closed by Mr Githae’s grant whose full import is to make all MPs tax compliant.

The Consumer Federation of Kenya (Cofek) said the minister’s action amounts to illegal pay increment for MPs, judges and soldiers that has not passed through the SRC.

“This simply amounts to a salary increment without following the laid down procedure,” said Cofek chairman Stephen Mutoro.

“Technically the Treasury has awarded these officers higher pay despite the fact that it lacks the mandate to do so.” 

Parliament has been allocated an additional Sh1.523 billion stated as grants to government agencies and other levies as well as other capital grants and transfers in the next financial year’s budget.

The Judiciary has received Sh2.86 billion as capital grants to government agencies and other levies of government and allocated Sh300 million to the ministry of State for Defence to offset current grants to government agencies and other levels of government.

The East African School of Human Rights said that although the Treasury had powers to protect the officers from the adverse effects of the new constitutional dispensation, other taxpayers must view the action as not only illegal but also immoral and unethical.

“This is a true reflection of selfishness among our leaders who feel the country owes them for being in positions they occupy….when fuel prices go up the public pays the extra cost and does not request to be exempted or be allowed to pay another day,” said Atunga Atuti the chief executive.

MPs, judges and magistrates, members of the Armed Forces began paying their taxes by midnight Friday 15th 2012, when the minister published a special gazette notice on the Provisional Collection of Taxes and Duties Act.
The notice amends the law relating to taxes and duties, including the Finance Bill which authorizes the levying of taxes.
“Now therefore, in exercise of the powers granted by Section 2 of the Provisional Collection of Taxes and Duties Act, the Minister for Finance orders that all the provisions of the bill relating to taxes or duties shall have effect as though the bill were passed into law.