Govt backtracks on MPs tax

November 11, 2008 12:00 am

, NAIROBI, November 11 – Acting Finance Minister John Michuki has dropped a proposal to tax Members of Parliament (MPs), judges and other constitutional office holders.

While Moving the Finance Bill on Tuesday, Michuki said the proposal introduced by his predecessor Amos Kimunya had attracted strong views from the MPs and members of the public.
“The proposal to amend the relevant law in order to impose the taxes will be removed from the Bill so that we shall have resumed the pre-June announcement within the law,” Mr Michuki told Parliament.

He had earlier on hosted the legislators for a ‘Kamukunji’ (informal meeting) to appeal to MPs to pass the Bill, which is about to hit its deadline in December when Parliament goes on recess.

The meeting was convened by Deputy Speaker Farah Maalim who told the press that it discussed the extent of powers of the executive to control the benefits of MPs in relation to taxing their allowances.

“The real issue here is law and to what extent the executive tinker with benefits to MPs.  They and the Minister (Michuki) are in agreement on the issue of taxation.  There is going to be further discussions and fine tuning and in due course we will see some progress in this and the Finance Bill will be passed,” he said.

Sources told Capital News that Mr Michuki had no option but to strike out the clause that proposed the taxation of MPs’ allowances for them to agree to pass the Bill.

Some MPs were heard threatening to frustrate the Bill if that amendment was not made.

Failure to pass the priority Bill by December this year would render all taxation measures outlined in this year’s budget illegal.

Last week, debate on the Bill was called off after MPs walked out of the House leading to a quorum hitch as soon as Mr Michuki moved debate on it.

Mr Maalim however strongly denied any sabotage saying: “quorum hitches are normal.”

In his budget speech mid this year, Mr Kimunya introduced taxes on MPs allowances and constitutional office holders saying leaders should demonstrate leadership by example. While the proposal was welcomed by members of public it attracted resistance from the legislators and judges.

Judges have had their allowances taxed for the last three months even before the taxes were legislated, eliciting protest.
Mr Kimunya had also suggested that constitutional office holders, including the Attorney General, Public Service Commissioners, Electoral Commissioners, the Controller and Auditor General and judges be compelled to pay taxes on their allowances.

Mr Kimunya did not sit to see his proposal come true after he was compelled to vacate his office following the Grand Regency saga.
The legislators present in the House cheered him as he made the announcement, and to guard their agreement earlier in the afternoon, none of the MPs dared to mention the MPs’ tax, a plan believed to have blurred their greed for huge perks.

However members of public interviewed by Capital News expressed their dissent with the new move.


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