Case against taxman put off

December 5, 2008 12:00 am

, NAIROBI, Kenya, Dec 4 – A case in which a Public Relations consultant wants the Kenya Revenue Authority (KRA) barred from taxing his income has been pushed to January next year.

Justice Joseph Nyamu on Thursday said it was not proper to hear the case in the absence of all concerned parties and directed that the KRA should be immediately be served with the court papers.

The judge also allowed lawyer Ashford Muriuki to incorporate the Attorney General in the case so as to represent the interests of those who might be affected by any orders issued by the court.

Public Relations consultant Michael Otieno had sued the taxman for discriminating against him by deducting taxes from his income while another class of Kenyans that includes Members of Parliament and other constitutional office holders were left out.

He had wanted interim orders issued for his taxes not to be remitted to the KRA until the case is heard and determined.

“My Lords we are seeking interim orders that the taxes deducted from my client be deposited in a joint account with a reputable bank where the Registrar of the High Court would be a signatory,” Mr Muriuki told the court.

Mr Otieno further asked the court to nullify section 5 as read with section 2 of the National Assembly Remunerations Act for being discriminatory.

“The section is inconsistent with the Constitution as it promotes economic and social discrimination by allowing MPs to get away tax free,” the court paper say.

But the judge declined to issue any interim orders and instead put off the case until January 6 since he did not see any possibility that Mr Otieno would be prejudiced if the defendants were duly served and the case heard in their presence.

“After careful scrutiny, this application is not suitable for ex-parte (one sided) hearing. I direct that the matter be heard inter-partes. The applicant will not be prejudiced in the meantime and I direct him to serve all the parties within three days,” Justice Nyamu ruled.

Even as the case was put off, pressure continued to pile on the MPs to give in to public demands to have their allowances taxed.

Former Cabinet Minister and nominated MP Musikari Kombo urged his colleagues to be sensitive and find ways of paying the taxes even if it meant amending the law.

Wajir North MP Mohammed Hussein Gabbow however opposed the move saying they had been paying the taxman all along through statutory deductions on their basic pay.

A cross-section of Kenyans have been pushing MPs to pay taxes on their hefty allowances amounting to close to Sh600,000.  The lawmakers arm-twisted acting Finance Minister John Michuki into dropping a clause in the Finance Bill that would have required them to pay taxes on the allowances.

At least three MPs have already written to the Clerk of the National Assembly for deduction of taxes on their allowances. Several others have indicated willingness to follow suit including those from the Orange Democratic Movement-Kenya.  But, they are yet to act.

On Tuesday, Parliament appeared to give in to the public demands and agreed to appoint an independent committee to look into the matter.

The National Civil Society Congress added another twist to the saga and said it would mobilise its legal team to challenge the decision by MPs to evade paying the taxes.

Chairman Morris Odhiambo said on Wednesday that the congress would challenge the legality of the Parliamentary Service Commission which is charged with overseeing the legislator’s remuneration accusing it of dishonesty.

“Given that the Parliamentary Service Commission is a body of parliamentarians by parliamentarians, it is essentially an employer and a trade union rolled into one. When MPs want more allowances all they do is to lobby their colleagues to pass a resolution,” Mr Odhiambo said.

The umbrella body of the civil society also threatened to ask its members to withhold paying taxes to KRA until the lawmakers retreated their decision.  Kituo Cha Sheria’s Mike Karanja said that his organisation would lead the boycott.


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