Africa

A brief look: Kenya’s MPs hold country to ransom and get away with it

By Simon Allison 15 August 2011

Not content with their R70,000-a-month salaries, Kenya’s MPs threw a sulk when they were told to pay tax like everyone else, threatening to cripple the government until they got what they wanted. Their bluff worked. By SIMON ALLISON.

The troubles began, as they so often do, with an unexpected letter from the taxman. The letter outlined exactly how much tax should be paid by Kenya’s elected members of parliament and The due date.

The MPs were outraged. Traditionally, the corridors of Parliament House in Nairobi are a tax-free zone, with MPs given relief to bolster their not-insubstantial salaries of more than R70,000 a month. But this time, the representatives were caught out by their own efficiency, with Kenya’s recently promulgated constitution declaring that all state officials are liable to pay tax. This includes MPs, at least according to the definition used by the Kenyan Revenue Authority.

Some paid up, including the president, vice-president, prime minister and parliamentary speaker. “I was forced to pay tax. I was under pressure from the public and civil society,” said vice-president Kalonzo Musyoka, defending his actions to angry parliamentarians. But most MPs have refused to settle the bill, saying that paying tax for the first time would be tantamount to a salary reduction, which they argue is a violation of Kenya’s Bill of Rights and international labour law.

In a show of just how serious their opposition is, they threatened to block the pending Finance Bill, the legislation needed to allow the government to raise money, in effect financially crippling the country. “We are ready to vote out the Finance Bill and that will trigger a paralysis of government and even dissolution of the House,” said one legislator.

And it looks like their hardline position has worked. Kenya’s Daily Nation this weekend reported the details of a secret meeting between a group of MPs and the executive. The outcome was good for MPs, but perhaps not so good for Kenya – the cost of all MPs’ taxes, both past and future, would be met by the government, with salaries rising to accommodate the tax and leaving MPs with just a little more cash to take home as well. They have been working hard, after all.

Some parliamentary programmes will be put on hold to cover this increased expenditure, which is estimated to cost the government somewhere in the region of R75 million in back taxes alone. MPs are also reported to be eyeing a nest egg of R190 million which was raised by the controversial sale of a government hotel to Libya earlier this year. This could be used to pay for future taxes (and consequently not for the construction of Lamu Port, for which the money was originally earmarked). DM


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Read more:

  • Secret deal struck to settle MPs’ Tax in Kenya’s Daily Nation;
  • How MPs plot to avoid tax on pay in Kenya’s The Standard.

Photo: A general view of the Kenyan parliament building in the capital Nairobi March 11, 2008. Kenya’s new parliament sought on Tuesday to speed up legislation ratifying a fragile power-sharing deal intended to guarantee the peace after a post-election crisis that killed more than 1,000 people. REUTERS/Noor Khamis.

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