KRA hits current and former legislators with tax shocker

The taxman has hit current and former MPs with a fresh shocker with a demand that every shilling paid to the lawmakers be taxed.

Former MPs will be hardest hit because even though they approved a Sh3.7 million send-off package for themselves, the matter is still in court and, therefore, they are yet to be paid.


The Clerk of the National Assembly, Mr Justin Bundi, said the gratuity that the lawmakers will get will be pegged on the Sh1.5 million that those of the Ninth Parliament got as winding-up allowance. But this time round, it will be taxed, and they’re likely to take home “about Sh1.2 million”.

In an interview with the Nation in his office at Parliament buildings in Nairobi on Thursday, Mr Bundi said every payment to the current MPs — including the Sh5,000 daily sitting allowance — will be taxed.

The MPs’ taxable pay is Sh532,500 per month, but they are in talks with the salaries commission to have it increased.

“There’s nothing that is not subject to tax. Everything will be taxed,” said Mr Bundi.

A full circular of what MPs will be paid will be released this morning.

The taxation also extended to Prime Minister Raila Odinga, Vice President Kalonzo Musyoka and Speaker Kenneth Marende, who will have to take home the taxable winding-up allowance of Sh1.5 million.

Finance minister Njeru Githae said because Parliament did not approve the retirement package for the PM, VP and Speaker, there was no way the Treasury was going to pay any more.

The three were entitled to allowance pay by virtue of having served in Parliament, and not for their duties in the Executive.

“The Treasury and the Ministry of Finance has no power to appropriate anything which is not included in the Budget. That is the law, and we will follow it,” said Mr Githae at a news conference in his office.

He said it was up to the MPs of the 11th Parliament to decide if they want to enact a law to pay the retired PM, deputy PMs, VP and Speaker.

The 10th Parliament passed a Bill with a retirement package — monthly pay, State funeral, cars, offices, staff — for these officers but President Kibaki refused to sign it into law because MPs had sneaked in a clause for a hefty Sh9.3 million gratuity for themselves.

On Thursday, Mr Githae dismissed talk of a special arrangement between Parliament and the Treasury targeting the balance of the Sh50 million that had been set aside for gratuity for President Kibaki.

“I have no money to pay. The Treasury has no safe,” said Mr Githae. “Parliament has a retirement scheme for the MPs who have served for two terms or more.”

A report prepared by a team led by retired chief justice Cockar had recommended a taxfree pension of Sh240,000 per month plus Sh7.2 million lumpsum for a retired Speaker. But no law has been approved to effect the recommendation.

Mr Githae said he was happy that the Parliamentary Service Commission and the Salaries and Remuneration Commission were negotiating a pay package, and added that the Treasury will be willing to see the fruits of the talks, and how it will affect the wage bill.

He added: “If you think what the SRC has given you is too much, it is up to you to tell them to reduce. If you think it is too little, it is up to you to tell them to increase.”