NAIROBI, Kenya Aug 11 – The row between Members of Parliament and the Kenya Revenue Authority over taxes boiled over on Thursday after they made it clear they would not honour an ultimatum by the taxman to pay up.
The Speaker of the National Assembly Kenneth Marende chaired a meeting attended by 70 lawmakers who vowed to ignore a letter sent to them by KRA on August 3, demanding that they settle their tax arrears by the end of this month.
Joint Government whips Jakoyo Midiwo and Johnson Muthama said that MPs would not pay tax on their hefty perks until the law was reviewed.
“To be honest with you, that letter will not be complied with. It’s good to be fair… it’s even wrong to lie to you, but the general direction of the kamukunji (informal Speaker’s meeting) was that, that letter should not be coming to us,” said Mr Midiwo.
The Kamukunji follows a meeting between House Speaker Kenneth Marende, Prime Minister Raila Odinga and Deputy Prime Minister and Finance Minister Uhuru Kenyatta last week.
The decision to hold the Kamukunji was provoked by concerns within the Executive that MPs might use the issue to delay the passage of about 10 crucial Bills related to the implementation of the Constitution, the management of elections and others whose time was fast running out.
Cabinet ministers have voiced their growing concerns that Parliament might hold these Bills hostage unless this matter is resolved quickly.
The KRA insists it will collect taxes due from the MPs and has given them 30 days since August 3 to offset their arrears or the taxman will attach their property and salaries.
However MPs accused the KRA of malice and mischief for having gone public with the directive.
Mr Muthama who has been paying taxes voluntarily defended his colleagues: “We don’t understand why the KRA is publishing the letter in the media, unless there is an ulterior motive.”
The MPs resolved to form a 15-member committee to look into modalities of resolving the issue, but they maintained that they would not be arm twisted to remit taxes.
The whips said the committee would include membership from the Executive and Parliament.
Key among the committee’s agenda is to draft a taxation law which will guide the process of MPs’ taxation as well as re-arrange the total tax regime by amending the VAT Act, Corporation Tax and Income Tax laws.
The MPs will target to include church organisations with commercial activities as well as informal traders in the tax bracket.
Mr Midiwo also added that they intend to tax funds received by civil society organisations in a bid to reduce the burden of the over taxation that has been placed on Kenyans.
Dalmas Otieno, James Orengo, Naomi Shaban and John Michuki will represent Cabinet Ministers in the committee while assistant ministers will be represented by Margaret Kamar, Joseph Nkaiserry and David Musila.
Mr Midiwo, Charles Kilonzo, Isaac Ruto and Rachael Shebesh will represent back benchers.
If the MPs decide to hold onto their position not to pay tax, the taxman will be at liberty to use all legal means within his disposal to recover the tax and arrears owed.
The MPs fell back on what they termed as the “opinion of the Attorney General” that was issued last July, just before the referendum of the Constitution saying that the KRA can’t tax them both “in law and in fact”.
“That letter is really irrelevant because if it was of help then we would not be here, if anybody believed it. What it shows and why we are mentioning it, is the level of dishonesty where a government officer can sit and just lie to another arm of government,” he said.
A letter sent to Parliament dated August 3 demands that the MP’s settle their tax arrears by the end of this month.
A section of leaders led by President Kibaki, Prime Minister Raila Odinga and Vice President Kalonzo Musyoka have already paid their taxes.
The adamant MPs cite that other professions such as the judges and senior military officers also enjoy the tax exemptions.
KRA estimates that the Parliamentary Service Commission (PSC) should remit about Sh700 million in income taxes this year, including levies on car imports.
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