KENYANS FURIOUS OVER PROPOSED MPS' PAY HIKE

Justice Akiwumi on the left with fellow commissioners
By Standard Team

Kenyans are furious with the planned massive pay rise for MPs.
In a move that has raised public outrage, the Akiwumi Tribunal has awarded legislators new hefty pay packages and also upheld their stand not to pay taxes on allowances.

Retired Justice Akilano Akiwumi

According to a report by retired Justice Akilano Akiwumi-led team, a copy of which is in possession of The Standard On Saturday, the salary increment from Sh851,000 to Sh896,000 for the 222 MPs works to an additional annual burden of about Sh120 million to the Exchequer. The Akiwumi team suggests only Sh350,000 of the new wage should be taxed.

This figure excludes the new salaries and perks of Prime Minister Raila Odinga (Sh1.67m), Vice President Kalonzo Musyoka (Sh 1.31m) and Speaker of the National Assembly Kenneth Marende (Sh 1.26), among other key Government officials.

The widespread outcry brought to the knowledge of the Akiwumi Tribunal on terms of services for MPs and National Assembly staff, was that MPs must pay taxes on the huge allowances they enjoy.

A Muslim cleric calls the move unacceptable, and contemptuous to the suffering Kenyan. The KenyaMuslim Advisory Council National chairman, Sheikh Juma Ngao, describes the move as dangerous for the rundown economy. Ngao said he was shocked MPs want more pay when most Kenyans earn a pittance. "The best person to get a pay rise must be the local Kenyan worker who struggles to feed his or her family and not MPs, " he said.

Hefty Pay Package

The cleric threatened to mobilise both Christians and Muslims to reject the hefty pay package proposal.

Bishop Cornelius Korir of the Catholic Church, Eldoret diocese termed the proposals as a reflection of the widening divide between the rich and the poor.

"Let them fight for the improvement of the lives of the people they lead. Let them show, for once, that they care. Until they do so, they should not be paid a cent more above what they earn," he said.

Dr Charles Otieno, the executive director of the Institute of Polity and Policy suggested that MPs be subjected to performance contracting if they felt they deserved higher salaries. "Kenyans need to know they are getting value for their money. As far as I am concerned our MPs are doing little. They spend their time politicking rather than passing legislations that will help Kenyans," he said.

He was however pessimistic that the legislators would turn down the "kind gesture" handed to them by the tribunal. "It is a done deal. Their refusal to pay taxes tells you how greedy this lot is," he added.

In exempting the lawmakers from paying tax, the report notes that "many of these protesters were, however, not aware of the fact that the allowances enjoyed by the Members of the National Assembly, were by law, exempt from taxation".

Trade Minister Amos Kimunya kicked off the tax storm in 2008 when he was Finance minister. Delivering his Budget speech, the minister proposed taxation of the legislators’ allowances in a move that was widely hailed countrywide.

The subsequent Finance Bill, 2008, which through clauses 43 and 47 sought to make the allowances payable, was published on June 12, 2008. However, the Bill was amended without any objection from Kimunya when it was debated in Parliament on November 25, 2008.

Tax issue

Over the years, the tax issue has attracted a lot of resistance from MPs. And it would appear the legislators have through the years found a smart way of avoiding the matter.

The striking aspect about non-taxation of the MPs’ allowances is the huge amount of their non-taxable allowances in comparison with their rather minimal taxable salaries. On average, their untaxed monthly allowances amount to Sh651,000 compared to the taxable basic monthly salary of Sh200,000.

The "mischief" behind this arrangement is obvious. To now rectify this discrepancy, the Akiwumi team suggests a reduction on allowances and an increase of the salary figure "so as to leave the take away remuneration, all together similar in amount, of the present untaxed allowances and the taxed salaries".

Akiwumi team’s action is also contrary to Secretary to the Cabinet and Head of the Public Service, Francis Muthaura’s written presentation to the Tribunal. "The projected economic growth as the Government launched the Vision 2030 for the period 2008-2012 was on average 10 per cent per annum. The current trend of events e.g. the drought, the recession among others has however, shown that this may not well be achieved. This has necessitated subsequent revision of economic growth projections. It is therefore, evident that the growth of the economy will not be able to sustain additional increases in remuneration levels," argued Muthaura.

In defending the MPs, former Clerk of the National Assembly, the late Samuel Ndindiri, presented a research paper on remunerations of MPs in the Commonwealth showing that many do not pay taxes on their allowances. These include, Bangladesh, Barbados, Belize, Cyprus, Grenada, Jersey, Lesotho, Malawi, New Zealand, Nigeria, Cayman Islands, Samoa, Sri Lanka, Trinidad and Tobago and Zambia. On the other hand, MPs in South Africa, Canada, Falkland Islands, Gibraltar, Malta, and Singapore pay taxes.

Foot the cost

Kenyan taxpayers may also be forced to foot the cost of building a new National Assembly if recommendations of the Akiwumi tribunal are implemented. The current chamber used by MPs was designed in 1947. The old chamber was supposed to be the upper house while the new chamber was the House of Representatives.

The report states the current chamber is totally inadequate and the deployment of Information Communication Technology ((ICT) therein has not been efficient.

The Parliamentary Service Commission (PSC) has apparently already bought land for construction of office block, set a process to rehabilitate the chamber and its drawings are ready and in the process of tendering.

The Akiwumi tribunal also wants the National Assembly to urgently embrace technology by connecting it to all constituencies. It seeks to make the legislative process more accountable and transparent by making it an electronic or e-Parliament.

"On information communication, representation made to this tribunal indicate that there is an attempt by the parliamentary service commission to move Parliament in the direction of e-Parliament. This was evidenced by studies carried out with Parliament of Singapore where average paper usage is less than five per cent and that out of the study it is the hope and wish of the Parliamentary service to reduce the 70 reams of paper used per week to even 10 per cent," says the report.